FANews
FANews
RELATED CATEGORIES

Making sense of the latest FAIS changes

01 February 2009 Varenka Newton, INTEC School of Insurance

Following the introduction of a somewhat bewildering new set of FAIS Fit and Proper requirements, deadlines, extensions and exceptions, intermediaries will be well-advised to speak to an accredited training provider to ensure they obtain the right qualifications at the right time.

The latest amendments to the FAIS Fit and Proper regulations, which were published in October 2008, bring both amnesty to financial service providers who were first registered with the Financial Services Board (FSB) before 2008, and the realisation for others that a full qualification is now the minimum requirement. And, in addition, once these requirements are met, more studying lies ahead.

The detail of the law is intricate and includes many different types of advisors, but the overview of the key changes below should assist intermediaries to start making sense of the new requirements.

Final deadline extension

The first point to note is that the 2008 FAIS deadline to obtain 30 and 60 credits has definitely been extended to the end of 2009. However, the FSB has warned that financial service providers must not expect this to be extended again. This means that if you first registered with the FSB between 2004 and 2007, you have until 31 December 2009 to obtain your 30 or 60 required credits, depending on the type of products you sell.

If you first registered with the FSB in 2008, you have until 31 December 2011 to obtain your 30 or 60 credits, or you have the choice to do a full qualification at the appropriate NQF level which will have to be completed by December 2013.

Amnesty for some

Herein lies the amnesty, in that everyone appointed between January 2004 and December 2007 need only complete an appropriate skills programme of 30 or 60 credits by the required dates above to meet the FAIS Fit and Proper requirements.

Much stricter control is now exercised for people who are appointed for the first time with the FSB in 2009 and thereafter, as the 30 and 60 credit qualifications are no longer valid.

In other words, there are no 30 or 60 credit skills programmes on the list of FSB recognised qualifications for people entering the industry after 2009. These new entrants must complete a full qualification.

Legislation also stipulates that organisations employing new individuals must provide for an undertaking that those individuals are willing to complete a full qualification in the required time.

Regulatory exams

Also new to the legal requirements is the introduction of regulatory exams. This has been implemented to make sure that advisors remain abreast of legislative and product changes and other issues impacting on the industry.

Regulatory exams apply to key individuals or representatives across the board, and are divided into First Level Regulatory Exams or core exams, and Second Level Regulatory Exams which are product specific. All individuals – including those who registered between January 2004 and December 2008 – will have to write the exams and be declared competent against the First Level Regulatory Exam by 31 December 2011.

Apart from representatives in Long-term Category A and Friendly Society Benefits, the exams are compulsory, with no exemptions and no exceptions.

The Second Level Regulatory Exams are product specific, and must be completed successfully by 2013. There are some exemptions and exceptions. This includes key individuals who are not giving advice and categories not required to write the First Level Regulatory Exams as well as some exceptions around specific categories or products that are not being sold.

And that's not all…

If that is not already a lot to digest, there will also be a three-year cycle of Continuous Professional Development (CPD) requirements, which will take effect once the applicable regulatory exams have been completed.

In addition, it is important to remember that if you add a product category to your licence, you will also need to complete the qualification requirement to sell that product.

In short, enormous task lies ahead for advisors. It is imperative that brokers start early and not leave all their studying to the last minute. It takes four to six months to study towards and obtain 30 credits, and about eight months to a year to obtain 60 credits, so advisors who need to meet the 31 December 2009 deadline must act now.

What will be invaluable to brokers navigating this new regulatory environment is a training provider partner that has an intricate knowledge of the requirements. Such a training partner will be able to provide guidance and advice on all study options, as well as highlight what is required for each adviser to be FAIS compliant and 'Fit and Proper' in the required time.

Of course, the training provider's courses must be INSETA approved and in line with SAQA requirements.

Quick Polls

QUESTION

What is your one-liner for the 2024 National Budget speech?

ANSWER

Creepy failure to adjust income tax, medical tax credits
Overall happy, it should support economic growth
Overall unhappy, soaring public sector wages and broken SOEs suck..
There are too few taxpayers, too many grant recipients.
fanews magazine
FAnews February 2024 Get the latest issue of FAnews

This month's headlines

On the insurance industry’s radar in 2024
Insurers, risk managers unsure of AI’s judgement credentials
Is offshore the place to be in 2024?
Gap claims: erosion of medical benefits, soaring specialist fees
Investments and retirement… is conventional wisdom under threat?
Subscribe now