News Date: July 19, 2019
Why Continuing Professional Development (CPD) is good for you and your firm.
What is CPD?
In today’s fast changing world knowledge gained through qualifications quickly goes out of date. Continuing Professional Development (CPD) is the practice of making a commitment to continuous improvement. This encourages professionals to be continually seeking to expand and develop their skills in a way that builds public trust.
CPD can take on a variety of forms. Crucially, CPD is facilitated and structured in a way that sets learning objectives and requires professionals to reflect on what they have learnt.
What are the benefits of CPD?
The core benefit of CPD is improving public trust. As the International Association of Insurance Supervisors (IAIS) states, “continuous professional development [is]… aimed at enhancing public confidence in insurance intermediaries through raising professional standards.”
CPD is more effective than relying on ’on the job’ training and experience for the following reasons:
CPD looks at preparing professionals for the future by anticipating the impact of new technology or regulations, rather than what’s merely needed to be competent now.
Good quality CPD goes beyond knowledge and skills and elements of ethics that are essential in building public trust.
In contrast, relying on learning through ‘on the job’ experience can mean bad habits develop as well as being duplicated when training others.
By employing CPD, international firms can align themselves across different markets, giving them a consistent approach to competence, ethics and care for the client.
How is CPD regulated?
The Insurance Distribution Directive (IDD), which came into effect on 1 October 2018, requires all staff who are directly involved in selling or administering insurance to do at least 15 hours of continuing professional development (CPD) per year. Its aim was to introduce a new requirement for staff who sell, advise on and transact insurance contracts for all types of insurance customers. The EU authorities wanted “to strengthen the confidence of customers” by improving minimum standards in key areas such as customer information, training and product governance.
By making CPD a key part of the IDD, insurers can keep themselves on track by doing the following:
All staff who are directly involved in selling or administering insurance will need to do at least 15 hours of continuing professional development (CPD) per year.
CPD can include courses, e-learning and mentoring, as well as attending training events and conferences. However, training should be ‘facilitated’, meaning that staff should not simply be left by their manager to learn ‘on the job’.
This CPD must cover a set of topics that are listed in the Directive, in a way that is appropriate for each role within a company. For general insurance, this includes: terms and conditions of the products being sold; terms and conditions of the products being sold; the insurance market and laws governing insurance distribution; claims handling, complaints handling, assessing customer needs, appropriate financial competency; and business ethics standards including the management of conflicts of interest.
What does CPD consist of?
CPD can comprise of a wide range of structured and unstructured activities including, but not restricted to, the following:
Training courses and workshops
Conferences, seminars and webinars
Studying for an examination
Reading and watching