Barry Taylor, Chairman of the Short Term Exco and Director at the Financial Intermediaries Association of Southern Africa (FIA)
Regulatory developments will remain a key focus for intermediaries in 2011, as ongoing legislative changes within the insurance space are set to further define the changing role of the insurance intermediary.
According to Barry Taylor, Chairman of the Short Term Exco and Director at the Financial Intermediaries Association of Southern Africa (FIA), this follows an eventful 2010 for insurance intermediaries, who participated in the processes involved with the draft regulations of the Insurance Laws Amendment Act (ILAA), the set up of the Data Sharing project (STRIDE) and Treating Customers Fairly (TCF) initiatives.
“With the promulgation of the ILAA Binder regulations as well as the full implementation of the FAIS General Code of Conduct, Conflict of Interest regulations and the Consumer Protection Act going live, 2011 is set to be another eventful and defining year for insurance intermediaries.”
Taylor says it is important not to underestimate the time, effort and cost that the implementation of such issues will have on the industry. “Management and all responsible staff will need to apply themselves to ensuring that sound and good practice, as well as a common sense approach, continues to be adopted as the various regulations come into force.
He says the new Treating Customers Fairly (TCF) guidelines, which are currently being thrashed out by the FSB and other related industry bodies, will be a milestone not only for insurance intermediary sector but for the Insurance Industry as a whole. “This is an important piece of legislation that aims to ensure the fair treatment of customers, primarily by product providers.
“It also seeks to promote consumer confidence in service providers by ensuring they, the consumer, are provided with clear information before and after a transaction; that all advice is appropriate to their circumstances; and that they do not face unreasonable barriers when it comes to the changing of products.
He says there is a clear trend for greater consumer protection and intermediaries will need to adapt to this changing face of regulation. “There needs to be a far more professional approach regarding how business is transacted. This will involve not only a closer look at education and skills development but also greater scrutiny on how intermediaries can become more efficient and customer centric.”
Taylor says aside from regulation, a further challenge that is certainly being faced by the intermediary industry is the need for skilled practitioners. “The industry is crying out for new talent and the time has come for a real and concerted effort into designing an education and development programme to elevate the all-round skills of our members.
“In particular with the imminent RE1 examinations that are being introduced for all financial services representatives, the FIA is in the process of negotiating .an advantageous learning package for our members to assist them in this process.”
Taylor says that the role of the intermediary is challenging, with new direct insurers as well as retailers now venturing into insurance. “However, there is a place for the intermediary in a market that has become saturated with “other” players which can only lead to confusion amongst consumers who are no longer receiving advice and are instead buying a commoditised product without knowing whether it is right for them.”
“Intermediaries need to continue honing their skills, understand their client’s needs and offer a range of innovative and cost effective products backed up by good service. There is nothing new in this but it is these basics that underline the value of the insurance intermediary.
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