Practice

December 2023
 

”On the first day of Christmas, the IA sent to me,
               The results of the market’s CPD”

Ah December! The season of good will and good cheer as we approach Christmas. And what a difference a year makes!

This time last year we were looking at disappointing results which showed that only approximately  90% of Individual Licensees in the market had met their Continuing Professional Development (“CPD”) requirements for the assessment period from 1 August 2021 to 31 July 2022 (“2021/22 Assessment Period”). Individual Licensees are required to attain 15 CPD hours every assessment period to keep their professional knowledge and expertise – the very elements on which members of the public place reliance – up to date. A 90% compliance rate, therefore, meant potential policyholders stood a 1 in 10 chance of dealing with an Individual Licensee who had failed in satisfying this most basic of requirements. In no way was this an acceptable state of affairs.

Something needed to be done and since appointing principals bear a significant responsibility for ensuring their appointed Individual Licensees comply with the CPD requirements, this was where improvement needed to be targeted. So twelve months ago, we published our first CPD Non-Compliance League Table listing out the 10 principals in the insurance market with the highest percentage rates of CPD non-compliance across their appointed Individual Licensees for the 2021/22 Assessment Period.

The aim of this disclosure approach was to galvanize the insurance market into action, to do better, to be better and to demonstrate that it is better to the public it serves.

We complemented this with CPD thematic inspections in the first half of 2023, identifying areas for improvement and offering tailored recommendations for the companies in questions. 

Together these actions aimed at encouraging and supporting the industry towards achieving significantly improved CPD compliance.

The question is: did it work?
 

CPD assessment period 1 August 2022 to 31 July 2023 (“Assessment Period 2022/23”)

For the Assessment Period 2022/23, a total of 102,208 Individual Licensees were required to complete and report their completion of CPD hours. A total of 98,258 Individual Licensees complied with these requirements on time.

This means the overall compliance rate has improved from 90% in the Assessment Period 2021/22 to 96.1% in the Assessment Period 2022/23. But this improvement only tells part of the story.

Firstly, whereas last year (i.e. Assessment Period 2021/22) Individual Licensees were required to attain only 12 CPD hours, this year (Assessment Period 2022/23) the number of CPD hours increased to 15 hours. 

Secondly, the vast majority of the 3.9% non-compliant Individual Licensees, by the date of this publication have either already had their licences revoked or their licences are under automatic suspension as they have ceased to have any appointing principal. Either way, they are not carrying on regulated activities in the market any more.

Thirdly, only 0.3% of Individual Licencees with licences that are currently active were non-compliant in the Assessment Period 2022/23. This means that at the time of writing, potential policyholders can be 99.7% confident that the Individual Licensees providing them with services through regulated activities have met their CPD requirements and that their knowledge and expertise is up to date.

Last year (Assessment Period 2021/22), the top 10 principals in the Non-Compliance CPD League Table had non-compliance rates ranging from 23.8% to 7.1% amongst their appointed Individual Licensees. This year (Assessment Period 2022/23), every one of those same 10 principals¹ have achieved 100% compliance across their Individual Licensees. This proves that with the right culture nurtured and robust controls established through its intermediary management function (as indicated in the December 2022 edition of Conduct in Focus), a principal can achieve a perfect result!  Indeed it was particularly reassuring to see several insurers exceeding the practices we had articulated (with one insurer, for example, setting a 3- month advance date for targeted completion), in order to yield their 100% compliance.

To continue to reinforce this direction of improvement for the market (and at 96.1% there is still room for improvement), we publish again the CPD Non-Compliance League Table for the Assessment Period 2022/23, being the top 5 insurers with the highest percentage rates of CPD non-compliance across their appointed Individual Licensees in the Assessment Period 2022/2023, each with a total number of ≥15 non-compliant Individual Licensees: