CII's Reaction to FCA's Suggestions for Eliminating Mandatory Training Hours
The Financial Conduct Authority (FCA) has proposed a change that could significantly impact the insurance industry. The regulatory body has suggested removing the annual 15-hour continuing professional development (CPD) requirement for insurance professionals, as part of a broader consultation (CP25/21) aimed at simplifying insurance conduct rules.
However, the Chartered Insurance Institute (CII), a leading organisation in the insurance sector, has strongly opposed this proposal. In a letter distributed to all its insurance members on Friday 27 June, the CII's chief executive, Matthew Hill, wrote that the FCA's proposal to remove the 15-hour training requirement sends a worrying message that personal development and skills in insurance don't matter.
According to a survey conducted by the CII among its 582 members, 80% believe the removal would damage the profession's reputation, and 83% agree that CPD is essential to being viewed as professional by clients or customers. The CII argues that removing the 15-hour CPD minimum without a clear alternative would weaken professional standards and harm public perception of the insurance profession.
The FCA's defence for the move is to remove "outdated and duplicated requirements," allowing firms more flexibility in how they maintain competence. FCA director of insurance, Matt Brewis, acknowledged concerns raised, particularly about impacts on smaller firms and potential lowering of standards, but stressed the intention is to provide firms with more discretion.
The FCA is currently reviewing feedback from the consultation and has not yet announced a final decision. In response to the backlash, the FCA has emphasized its goal of removing outdated requirements and ensuring regulatory simplification. However, the CII is urging the insurance profession to uphold high standards of behaviour following the publication of the FCA's findings into culture and non-financial misconduct in the insurance industry.
The CII's roundtable report also calls for a 'coalition of the willing' to move beyond identifying characteristics of vulnerability, and put customers ahead of targets in the insurance industry. The report emphasizes the need for more action to help vulnerable customers in the insurance industry. The CII's own CPD requirement will remain irrespective of the outcome of the FCA's consultation.
[1] [FCA Consultation Paper 25/21](https://www.fca.org.uk/publications/consultation-papers/cp25-21-simplifying-insurance-conduct-rules)
[2] [CII Response to FCA Consultation](https://www.cii.co.uk/media/2169/cii-response-to-fca-cp25-21-simplifying-insurance-conduct-rules.pdf)
[3] [FCA's Defence of the Proposal](https://www.fca.org.uk/news/speeches/fca-s-matt-brewis-speaks-insurance-institute-london)
[4] [CII's Urging for Higher Standards](https://www.cii.co.uk/news/news-and-blogs/news/2021/june/cii-urges-industry-to-uphold-high-standards-of-behaviour-following-fca-culture-report)
- The Financial Conduct Authority (FCA) argues that removing the 15-hour Continuing Professional Development (CPD) requirement for insurance professionals is part of their goal to eliminate outdated requirements and ensure regulatory simplification.
- In contrast, the Chartered Insurance Institute (CII) argues that removing the 15-hour CPD minimum without a clear alternative would weaken professional standards and harm public perception of the insurance profession, as indicated by their survey where 80% of members believe the removal would damage the profession's reputation.
- While the FCA defends their proposal by stating that it would give firms more flexibility in how they maintain competence, the CII is urging the insurance profession to uphold high standards of behavior, especially in light of the FCA's findings into culture and non-financial misconduct in the insurance industry.
