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What’s beyond the challenging hurdle of RE1?

03 June 2013 Fatima Maharaj, Etana Academy

The Regulatory Examination was one of the most influential changes to impact our industry in years. And while the industry thinks that this hurdle is left behind, there are more progressive upgrades ahead.

We are truly living in a world where lifelong learning is a requirement. The purpose of the RE1 exams was to professionalise the industry and gain our client’s trust. However, RE1 was independent of other moves to upgrade the service we give to consumers.

Establishing context and removing misunderstandings

To put everything into context and remove any remaining misunderstandings, Regulatory Exams are a requirement over and above all other necessary credits and qualifications within the insurance industry. RE1 was imposed by the Financial Services Board (FSB) following investigations into the affairs of Financial Services Providers (FSP) when it became clear that Key Individuals believed compliance with the Act was the responsibility of compliance officers. This however was not true.

The role of the compliance officer is to:
- To ‘monitor’ the Financial Service Provider’s compliance with the Act.
- Assist with training.
- Make recommendations.
- Submit reports to FSP and FSB.

The responsibility of complying with the Act rests very squarely on the shoulders of key individuals.

Increased knowledge of legal framework

Having conducted over 40 RE workshops in South Africa, our Etana Academy Team has found the general knowledge of relevant legislation has greatly increased over the last three years.

Many newly aware Key Individuals have changed processes and procedures to be in line with legislation. And this came at the right time, strong enforcement exists for those who need it. Key Individuals can face large fines and even imprisonment periods, if they don’t comply.

Shaping the future

Moving forward, if you operate within the South African insurance industry and intend to stay, your smartest plan would be to complete the RE1 Key Individual as well as the representative examination, whether or not you’re currently working in this role. This ensures you obtain a product specific recognised qualification.

At the very least, this recognised qualification will earn you exemption from Level Two Regulatory Examinations (RE2) when they’re implemented.

The good news is that, in conjunction with the Insurance Institute, the Etana Academy continues to offer preparatory RE workshops for those who need a last minute boost. And at the end of last year Etana launched an online qualification which makes complying with the qualification requirement much easier. Online study means you choose when and where, and on what device, you study.

Treating Customers Fairly on horizon

Now we await Treating Customers Fairly (TCF) with its potential of having an even greater impact on brokers than FAIS, requiring dramatic organisational and cultural shifts toward customer centricity.

FAIS compliance links directly into the TCF framework and requires companies to demonstrate ‘management information’ to the FSB.

TCF will mean senior management can be held individually responsible for contraventions. It will require anyone operating in the financial services industry receives relevant product training and, importantly, remains up to date with industry developments.

We need to take a proactive approach to training and development to avoid poor hasty decisions.

Technology to the rescue

With today’s pace of change and development, a life of continuous learning is a must for the ambitious and technology now makes that possible.

You can sit on your couch in Kimberley and attend an online reinsurance training session happening in Germany. Etana is working with the Insurance Institute, and made our eLearning platform available to them, to ensure that kind of training becomes normal.

Economic pressures mean having staff away for days doing face-to-face training is impossible. Also, many road shows and education initiatives don’t include remote areas. This is why Etana’s online qualifications have received enthusiastic response. They are available to our broker network and will soon be accessible to the broader industry.
Quick Polls

QUESTION

How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?

ANSWER

Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
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