Car retailers have been warned not to breach the Financial Conduct Authority’s new Insurance Distribution Directive, which demands increased staff training in a bid to enhance consumer protection.
Businesses selling any form of insurance face a new raft of compliance procedures and the FCA has directed that firms implement 15 hours of learning and continuous professional development (CPD) a year for anyone selling these financial products.
The warning comes from employee engagement and digital learning company Intuitive Learning. CPD is a crucial element of the directive, and all companies must evidence that staff have a minimum knowledge requirement.
The new rules came into effect this month (October 1) and dealers need to be aware of a range of measures that include suitability assessments and reporting, product governance with documented distribution procedures that are endorsed and overseen by your senior management team and regularly reviewed to check they are still valid and up to date.
Dr Jeremy Moore, director of academic research at Intuitive Learning, said: “Dealers selling any form of insurance need to be aware of their responsibilities under the Insurance Distribution Directive.
“A vital element of the directive is that staff must have a good understanding of what they are selling and be able to evidence at least 15 hours a year of continuous learning.
“We have liaised with the FCA to ensure that our approach meets the requirement.
“The advantage is that each employee can undertake the training wherever and whenever suits them. This model is proven to boost levels of engagement and understanding.”
Intuitive Learning claims to provide a new approach to employee engagement and retained knowledge, using digital technology with artificial intelligence (AI) to allow users to learn when and where they want on a device of their choice.
The training specialist claims that using the company’s Cognito platform for 20 minutes a week will provide 15 hours of learning a year.
Moore said: “Dealers work in a heavily regulated world. Our system is designed to ensure staff understand and implement compliance procedures, all with measurable and auditable results.”
Additional measures under the Insurance Distribution Directive include a minimum limit of indemnity on a firm’s PI cover for a single claim per year will be €1,250,000.
For non-investment insurance contracts, the nature and basis of the remuneration received for advising on or arranging the contract must be disclosed.
Dealers should not be remunerated or remunerate or assess the performance of employees in a way that conflicts with the duty to act in a client’s interest.