Continuing Professional Development (CPD)

YOUR COMPLIANCE MATTERS:   Continuing Professional Development (CPD)

Relevance:                   All firms.

Action required:           Review levels and recoding of CPD for all relevant staff.

The Insurance Distribution Directive (IDD) came into force on 01 October 2018 and introduced a number of new obligations that firms involved in the designing and selling of insurance products need to meet.

One of those obligations is that everyone involved with insurance distribution, no matter how little that may be, has to undertake at least 15 CPD hours per year.  The FCA also expects the training to cover specific areas which it refers to as ‘minimum knowledge criteria’.

These areas include product coverage, the claims process and insurance regulation among others. Training and development can include various types of facilitated learning opportunities including courses, e-learning and mentoring. You also need to establish, maintain and keep appropriate records to demonstrate compliance with employee knowledge and ability requirements.

So, this obligation has been in force for 14 months to the end of November. Firms were able to choose the commencement date for its CPD year, for instance, some firms chose 01 October, some 01 January.

Whichever date was chosen, your records need to show what has been achieved. Remember, it is an annual requirement of 15 hours (minimum).

·          If you commenced from 01 October 2018 then by 30 September 2019 each relevant person’s CPD record should show at least 15 hours have been completed.

·          Those using 01 January 2019 as their start date should show the CPD activity for October to December 2018 as a minimum of 3 hours 45 minutes. Then, to the end of November 2019, a running figure of 13 hours 45 minutes would mean being on track, providing a further 1 hour 15 minutes can be achieved during this month (December).

As this requirement is part of a Rule (A firm must ensure that each relevant employee completes a minimum of 15 hours of professional training or development in each 12 month period.), a failure to reach the minimum level of 15 hours per annum will be a Breach and should be recorded in the firm’s Breach Register.

At this point, it would not be necessary to refer the Breach to the FCA but you must put steps in place to prevent the Breach reoccurring as continuing to fail the requirement will become reportable.

Therefore, now is the time to ensure that your CPD system is fully operational and allows you to satisfy the “knowledge and ability requirements” of the FCA.

If you need any help in this matter, please contact us.