Regulatory Job Specifications (Part 2)

In a previous article we looked at the basics – now let’s expand on what we mean by Knowledge, Understanding and Application.


Obviously, you can’t expect an employee to be competent without a thorough technical knowledge of the products they are selling.  Generally, knowledge will be split into two areas:

External Knowledge

This will be general knowledge about the type of policy and will include the way a policy is constructed and the relevant laws that apply to it.  This is often known as ‘generic’ knowledge.  This area will also include knowledge of the relevant FCA rules and guidance.

Internal knowledge

This will be knowledge that is specific either to your firm, or to the product provider. It may include special policy features that are not generally available with all similar policies on the market.

Your main concern at the moment is the first part – external knowledge – since you will need to be sure that an acceptable level is attained before the individual can be deemed as competent to sell to the general public.  For firms using the Aviva Development Zone, this can easily be achieved by setting the relevant courses for individual employees.  A good example of a learning plan for an Account Handler dealing with Private Motor Insurance might be:

  • FCA Regulations – Overview & Introduction
  • Private Motor Insurance – Introduction
  • Private Motor Insurance – Underwriting
  • Motor Legal Expenses
  • Private Motor Insurance – Non-Standard Risks
  • Motor Claims – Introduction
  • FCA Regulation – Claims
  • Principles of Insurance
  • Advised and Non-Advised Sales
  • Explaining the Services on Offer
  • Documents the Client Should be sent, given or have access to

Once these bite size courses have been completed you can analyse where the gaps in knowledge are, which will allow you to create a training plan for that individual for them to reach or remain competent. 


What do we mean when we talk about ‘understanding’ in the context of competence?  A good example might be where an employee is transacting private car insurance.  The employee (let’s call her Jane) dealing with the customer should have sufficient product knowledge to be able to distinguish between comprehensive and third-party cover and explain the existence and effect of excesses and any other restrictions or benefits, in order to enable the customer to make an informed choice on cover; this includes taking into account the value of the vehicle and the alternative premiums for the respective covers.

It’s all very well Jane having an expert knowledge of a policy, but if she cannot relate that knowledge to a practical situation it becomes useless at best and a liability at worst!  A number of questions arise. For example:

Can she make a reasoned judgement about the suitability of the policy for a specific customer? 

Could she demonstrate, in writing, how she came to the conclusion that the policy she recommended was the most appropriate she could offer to the customer? 

Can she demonstrate that she knew enough about the customer’s needs and circumstances to make a reasonable recommendation?

It is easy to take this all for granted (especially when Jane may have been doing the job for a number of years) and yet it is an intrinsic part of the regulations that an employee demonstrates understanding of what he or she is selling.

Application Skills

This is often called simply ‘Application’. It is the combination of knowledge with understanding put into practice and provides you with final proof that an employee is truly competent to deal with the public.

A useful analogy might be that of constructing a new building. Jane knows that to construct a building she needs detailed knowledge of the basic tools and material.  She also needs to know which type of, say, bricks and mortar are most suitable for which type of construction.  She will also need a detailed knowledge of the type of land that she is building on.  This is the external knowledge that we mentioned previously.

Next, she will need to understand the consequences of not using the right type of materials, or perhaps what will happen if the footings are not put in correctly.  This demonstrates her understanding of construction.

Finally, she will have to put all this together, and construct a building that will stand up to the elements, hopefully for a long time, with the minimum amount of maintenance and within the budgetary restraints indicated by the customer.  She may even have to justify to the architect why she has decided to use a different material to the one specified on the original drawings.  This will demonstrate that she can apply her knowledge and understanding of construction in a real-life situation, not just in theory.  This is what you are looking for when considering application skills.

Application is always about the employee demonstrating that they can actually do something and will often come as a result of them being shown how to do it in the first place.  For this reason, you will also have to demonstrate that the person responsible for supervising Jane is also competent at the job.

Now you are beginning to understand what demonstrating competency means, you should consider how it applies to each area of Jane’s working life.

You must also consider the way that Jane is expected to achieve her ‘outputs’ (the things that she has to produce in the course of her working day).  She deals with customers both face-to-face and on the telephone and this will be relevant when you consider the Training Needs Analysis in the next article in the series.  For now, let’s summarise on the job specification.

What should a regulatory Job Specification look like?

It should be a detailed breakdown of the tasks that your employee is required to perform and what he or she is expected to produce as a result.  This is the first stage in constructing a Training and Competence scheme.

You are seeking to identify what they do now, so that you can look at where their knowledge, understanding, and application skills deficiencies lie.  This will enable you to train and develop the employee so that they can achieve and consistently demonstrate competence to the satisfaction of the regulator.

It’s also good for you because it enables you to carry out performance reviews/appraisals accurately, making them less of a chore and it’s good for your business too: employees who know what is expected of them and the standards they need to work to demonstrate increased productivity and present a greatly reduced financial risk to your company.  They also give you satisfied and loyal customers, meaning that you retain business and satisfy the TCF rules.


About the author

Kate is the chairman and co-founder of RWA and has worked for the company for nearly 20 years. She is a fan of developing practical, workable, business-led policies and procedures. Kate has specialist training experience within the financial services sector, including major general insurers, and the Lloyd’s underwriting and broking market.  She has researched and developed numerous training programmes, both for commercial and in-house use.  She has extensive experience of developing in-house and public training programmes for business skills, including Diversity, Employment Law, Management and Leadership, Motivation, Coaching and Feedback, Communication Skills and EQ.

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