Moonstone: Regulatory exam update
The theme, “Rising to the challenge” of the Insurance Conference hosted by the FIA, iiSA and SAIA at Sun City is indeed apt, given the challenges the industry faces from a wide variety of sources ranging from legislation and technology to terrorism and the environment.
Charene Nortier, Manager FAIS Supervision at the FSB was part of a trio giving an update on the regulatory environment. In her slot she gave some fresh perspectives, while at the same time reminding delegates of some upcoming deadlines.
Why the Regulatory Exams?
The first big deadline was 31 December 2009 by which time FSPs had to attain at least the minimum qualification and experience requirements to be regarded as competent.
As late as last week I received a phone call from a broker asking for confirmation that he would not need to write any of the regulatory exams as he did obtain his 60 credits before the end of 2009. If you share this view, I suggest you seek help urgently from a reliable, knowledgeable source. This topic has been covered extensively on this platform.
From 2010, a further element, the regulatory examinations, is included under the competency requirements to ensure that the required knowledge and skills are standardized in line with applicable legislation and one’s approved licence categories.
The level 1 exams will focus on the FAIS and FIC acts as well as all related subordinate legislation while level 2 will be product specific.
Since the FAIS Act became effective, a myriad of courses and qualifications came into existence. What the FSB has effectively done (and continues to do) is to determine which qualifications provide sufficient knowledge and skills to a learner to be able to operate at the desired level. Depending on how specific the knowledge contained is in a qualification, it can be recognized as a Specific qualification or, although containing sound financial principles, is not specific in addressing product knowledge, and is therefore recognized as Generic qualifications.
Of particular note is the fact that, in level 2 examinations, it is not the detail of company A or B’s product that is tested, but the underlying principles that apply to such products.
Continuous Professional Development
After successful completion of the level 1 and 2 regulatory exams within the required time frames, FSPs and representatives are required to conform to specified minimum CPD requirements.
One would be loathe to consult a doctor who takes no trouble to stay abreast of new developments on the medical front, and the same principle applies here.
Means of attaining CPD points include courses, workshops, conferences, seminars, studies leading to formal assessment (including distance learning), structured self study programmes, and including web and computer based programmes that assess knowledge. The one provision is that it has to be conducted by a body, which can include professional bodies, industry associations, and even employers, who have ensured that the programme/ seminar/ conference they offer is recorded for CPD purposes.
CPD only comes into effect once a person has
successfully completed the relevant regulatory exams.
WILL THE REGULATORY EXAM DEADLINES BE EXTENDED?
While this was not covered by Ms. Nortier, this subject crops up in virtually every discussion we have with callers, and need to be clarified to avoid false expectations and bad planning.
The announcement of the regulatory exams included deadlines for completion, but not “by when” dates, for the simple reason that there were too many variables to state exactly when it would be available. There were certain target dates, as is good business practice, but for reasons explained in previous communiqués, the importance of accurate delivery rightfully outweighed early delivery.
From a practical perspective most key individuals and representatives will be liable to write more level 2 than level 1 exams, hence the deadline of 2013 for level 2 for most current FSPs.
It therefore makes sense to prepare properly and write the level 1 exam at your earliest convenience, leaving yourself more time to complete the level 2 exams. Delaying the writing of the level 1 exam will only lead to bottlenecks as we approach the final date of 31 December 2011, and should be avoided at all costs.
It is gratifying to hear that most of the big corporates that we have spoken to are planning for their intermediaries to write the level 1 exam as soon as possible, and suggest that you follow suit.
Relying on a possible extension is not only dangerous; it also causes unnecessary pressure that comes with delaying the inevitable. Rather adapt the Soccer World Cup slogan to:
“Feel it, it is near.”
