Competence gained

Every broker that is authorised should visit the Financial Services Authority website and read TC1 and TC2 from the FSA Handbook. They are very clear and easy to understand and outline the rules for training and competence. One of the key requirements of FSA is that each person is competent to do the job that they do.

Modern concepts of competence involve having the knowledge, understanding and ability to ensure all staff are doing all jobs to a reasonable standard.

Using the task of building a wall as an example, I know what is required to build the wall (bricks, sand, cement, tools, etc.), I understand the correct mix, bricks, tools and what they are for, therefore, I can build the wall. Take away any of the elements, however, and there could be risk.

There can also be different levels of competence involved depending on the height of the wall, for example. Jobs in insurance are no different and the first thing that needs to be considered is what the job involves in terms of these elements, how to assess them, how to measure gaps and fill them and how to supervise the individuals to ensure that competence is maintained to the required standard.

The Chartered Insurance Institute has launched BrokerASSESS, which has a job specification engine, generic knowledge assessments and case studies to help discover what you and your staff do or do not understand. Add to this the launch of the Faculty of Insurance Broking in September, and CII is probably a major port of call for anyone struggling to become compliant.

Modern competence assessment is not about passing or failing but about the process of identifying and addressing weaknesses in any given job.

If the gaps are such that customers might be unreasonably at risk, for example, by not fully understanding the duty of disclosure and being unable to explain it in a way the customer understands, then constant supervision must be provided or the person withdrawn from the job until the gap is filled.

With the right help it is relatively easy to put together a training and competence plan and get it up and running. Start now and make sure enough time is allocated. The FSA is not going to be amused if something goes dreadfully wrong early in 2005 and it turns out you have done little towards measuring the competence of you and your staff.

Ian Ritchie, Managing director, RW Associates.