It has been almost a year since the Insurance Distribution Directive (IDD) came into force for insurance intermediaries. The directive, which came into effect on the 1st of October 2018, brought with it new training requirements.
Under the IDD, individuals involved in the insurance distribution chain must complete a minimum of 15 hours’ CPD (continuing professional development) each year and demonstrate minimum necessary knowledge across eight core competencies, which are:
- Terms and conditions of policies offered
- Applicable law
- Claims handling
- Complaints handling
- Assessing Customer Needs
- The Insurance Market
- Business Ethics Standards
- Financial Competency
A year on, are firms meeting their training requirements and recording 15 hours’ CPD across the above areas?
CPD involves undertaking meaningful learning activities, alongside one’s day to day role. It is a personal as well as professional endeavour which should be specific to the individual learner.
Reflection is particularly important and is an element of CPD which should not be overlooked. Without the reflective statement, CPD has not been properly completed. Insurance intermediaries need to understand how the eight core knowledge areas, listed above, relate to their role.
A year ago, to coincide with the arrival of the IDD, the Aviva Development Zone launched a dedicated IDD pathway. The Pathway is divided into eight manageable sections, covering the core knowledge requirements, as well as an introductory module which gives learners an overview and context for the IDD. For the past twelve months our Course of the Month has also tied into the IDD’s requirements, focusing on a different topic each month – such as understanding policy documents or the role of insurance brokers and the insurance market.
In the year since it was launched, we have seen firms embrace the IDD Pathway. The Aviva Development Zone utilises a gap analysis model which, as the name suggests, involves identifying gaps in an individual’s knowledge and the areas they need to work on to achieve competence in their role. Gap analysis is useful in showing where improvements are being made. For example, the average initial score on the ‘IDD – Insurance Distribution Directive’ module is 61.73%, jumping to 81.34% (a pass) when the assessment is re-attempted – suggesting that our learners are getting to grips with the material.
However firms wish to tackle their CPD requirements, it is important that they do so. Training and competence should not be overlooked, particularly with further regulatory change on the horizon due to the implementation of the Senior Managers and Certification Regime (SM&CR) in December.
The new regime will also require training for all financial services staff on the FCA’s Conduct Rules and how they apply to individual roles. Senior Managers and staff caught by the Certification Regime must also be able to show, on an annual basis, that they remain ‘fit and proper’ to carry out their roles, including having the necessary competence and capability.
A year on from the arrival of the IDD – and ahead of the implementation of SM&CR – it seems like a fitting time to consider whether your firm is sufficiently prioritising its training and development needs.