How much do you know about insurance? The IDD sets out a minimum necessary knowledge requirements for every insurance professional across eight core competencies. The knowledge and understanding required at this basic level concern the fundamentals of insurance. For example, at a basic level an employee should know about:
- The fundamentals of insurance (risk and its historical basis)
- Insurable interest
- Proximate cause
- The duty of disclosure
- The basis of a contract
- What constitutes an agency
- Basic insurance law
- Business ethics
- Minimum financial competence
- Regulation and the law (what it is and how it works)
- The insurance market and market practice
- Basic law (data protection, health and safety, proceeds of crime)
In simple terms, a basic level of knowledge should include those matters which relate to any level of practice irrespective of complexity. (This list is certainly not exhaustive - for a more detailed breakdown, please refer to the Aviva Development Zone's IDD pathway).
Only once a firm is satisfied that its staff, regardless of seniority, have the minimum necessary knowledge required for the IDD, should you focus on the next stage of knowledge and understanding which is job and product specific.
Each firm needs clear definitions for roles, responsibilities, and an in-depth understanding of products. Each member of staff will have to demonstrate knowledge and understanding relating to the role or product.
This knowledge should include:
- Generic knowledge of the market
- The products you recommend and the differences between them
- Regulation and compliance as it relates to that role
- Specific law (Insurance and otherwise)
- Your firm’s own procedures and rules
This knowledge and understanding can then be applied to specific customer requirements, to demonstrate an understanding of the knowledge and how to apply it in a working situation.
In fact, you will probably find that all this basic knowledge and understanding will represent the majority of the assessment of even the specialist practitioner.
Conversely, what you do not need to include in the basic assessment is subjects such as this:
- Knowledge and understanding of contracts that the individual or the role does not embrace.
- Legislation that the individual would not be expected to comply with or address in the role.
- Burdensome detail of all the regulator’s requirements.
I would not expect the average broker employee to be able to explain, for example, the ramifications of the Carriage by Air Act 1961. In fact, I would not expect an employee at an intermediate level in the average broker to know this. The likelihood is that only an employee in a firm specialising in aviation risks would know the importance of this Act and for that firm, it may be a basic level of requirement.
However, and this is a most important point, you must understand that we are considering the requirements to satisfy reasonable competence benchmarks of a basic product or job. That does not mean that you as a firm should not develop your staff above this minimum level. Indeed there is a great commercial advantage to running a development programme alongside your underlying assessment system so that those individuals who are willing and able to go beyond what is required for the job are in fact preparing themselves to be competent in other jobs and at other levels.
So, while IDD sets out minimum requirements for necessary knowledge and CPD, going the extra mile remains the logical choice for each professional with a desire to remain competent to do the job at hand.
So, the key guidelines are as follows:
- Everyone should have a basic knowledge and understanding of the underpinning knowledge of the industry
- This should be assessed on a regular basis
- You should check that everyone applies the underpinning knowledge and understanding in their day-to-day work by supervision, monitoring, and assessment
- You should identify basic jobs and products and attach to them benchmarks standards of basic, intermediate or advanced. There may be anomalies
For example, you may feel that basic fire insurance knowledge is sufficient for advising on household insurance, but that you would prefer an intermediate knowledge of theft cover because many of your clients are wealthy and own antiques and art.
As a guideline only, if the customers’ needs are standard, then basic might apply, but for customers with special requirements or complicated needs you should be stepping up the standard.
- You should also be stepping up the standard for those in a supervisory capacity so that they can identify when a member of staff is moving beyond their proven competency.
- Try to identify those members of staff who can and want to go beyond the basic standards of their jobs and build CPD into their learning programmes. It is good for you and good for them, but try not to push people too far. In the broking world, there are many people who are happy to do the same job year after year to a very high standard. That is good for the customer.
Contact the team at RWA for further information on our IDD support services, including building IDD training and competence plans utilising the award-winning Aviva Development Zone platform.