Although there are still lingering doubts as to whether group risk will remain free from the clutches of the Retail Distribution Review (RDR), the recent emergence of two market-driven sets of exams has proved that not all moves to raise professional standards have to be instigated by the regulator.
Industry bodies Group Risk Development (GRiD) and the Association of Medical Insurance Intermediaries (AMII) have teamed up with the Chartered Insurance Institute (CII) to launch separate basic level qualifications, in July 2008 and April 2010 respectively.
Both exams are considered by the CII to be pitched at around A-level standard and are open not just to the members of the bodies concerned but also to the entire market – including staff at insurance companies with customerfacing roles. Additionally, both will in due course be followed by higher level exams – GRiD is expecting to introduce a more advanced paper next year and AMII is talking about something similar for the medium term.
There is even some mild overlap in subject matter, and the only really discernable difference in approach is that in a couple of years’ time AMII intends to ask members who haven’t passed its exam not to renew their membership.
For GRiD members, on the other hand, the decision to sit the exam will always remain strictly voluntary. The similarities between both approaches are in fact so marked that one cannot help wondering whether we will eventually end up with a joint exam.
Chris Ford, director of group risk at Jelf Employee Benefits, which is represented at both GRiD and AMII, says: “I could see a case eventually for having a joint module, and this would have the beneficial effect of encouraging a more integrated approach. At the moment the practice of dividing things into separate silos is out of sync with the trend for client requirements to have an integrated proposition. Clients are looking more for solutions than for products, and if intermediaries don’t gear up for that they might find that clients go somewhere else.”
The vast majority of industry leaders are highly supportive in principle of both sets of exams, emphasising the need for a baseline level of competence in a similar way to that which can be demonstrated by doctors and pharmacists.
After all, people’s health can be a sensitive issue and if you get things wrong there can be far-reaching consequences. Some organisations are therefore making it mandatory for relevant staff to pass the exams and others who are not are often bending over backwards to help those wishing to sit them. For example, at Legal & General, where sitting the GRiD exam is not compulsory, the support network in place includes
regular hour long training sessions, typically held during lunchtime, during which experienced staff talk through a specific chapter to help
explain the more complex issues in the workbook. The company also funds the costs of study materials and of sittingthe exam.
Most dissenting voices inevitably relate to the AMII exam, which is much newer and therefore more capable of still causing the odd shock to the
system. For example, Graeme Godfrey, director of Best Go Private, a specialist PMI intermediary based in Stanmore in Middlesex, compares it to being asked to sit your driving test every year.
I don’t think that exams raise professional standards because I think that all AMII members are quite professional already
He says “I don’t think that exams raise professional standards because I think that all AMII members are quite professional already. The whole health insurance and financial services industry is now about taking exams but at the end of the day clients deal with you because they like you and trust you and not because you’ve got yet another qualification after your name.
“It’s a well designed exam for sure and definitely provides a minimum standard benchmark but they are already intending to come out with
other exams on top of it despite the fact that we train continuously on product knowledge and keep up to date with schemes, and some of us have years of experience in the industry. It’s good for new advisers entering the group market as it gives them credibility and a reference
point but the majority of established players regard it as yet another qualification that doesn’t take into account what you already know. “
The counter-argument commonly presented to this is of course that if someone is vastly experienced they shouldn’t have to spend too long sitting for the exams. Indeed, Michael Payne, general secretary at AMII, even goes so far as to say that if you took 20 group intermediaries who are AMII members with 10 years or more experience in the field and sat them in front of the paper without any preparation he would hope that all 20 would pass.
At the time of writing there have been no results from the AMII exam, but it seems that the GRiD exam cannot reasonably be accused of being too time consuming to study for or – as has been frequently suggested – of being too easy. Howard Rayner, group legislation manager at Canada Life, who had a significant input into the exam’s development, reports that it was designed to take 40 hours to study for and is pitched
at people with around two years’ experience.
He says “At the end of the day people are saying that you can’t do it without doing a reasonable amount of work.
Originally many doubted that multiple choice would be a severe enough test and that people would go through the course book. But we’ve been proved right and the pass rate has been pretty much in line with what we planned at around 70 per cent. The people who put in the work don’t find it a breeze but they get through it.”
A section on taxation that is broader than group risk should, in particular, mean that even very experienced personnel need to read the course book.
Indeed, David Dolding, head of consulting at Lorica Consulting, who has worked in the group risk industry for 20 years, reports that he still learned something new from studying for the GRiD exam and observes that “If someone is being negative about the exam you have to question their motives.”
So far 1,518 people have taken the GRiD exam and 1,563 have bought the course book – some four times the number predicted at outset. It would therefore be no surprise if the murmurs of discontent about the AMII exams are much less audible a couple of years down the line.
THE RDR ISSUE
The possibility that group risk will somehow get included within the scope of the RDR continues to cause a little nervousness in some quarters of the industry. At the time of writing the consultation on the RDR and protection generally – which was being carried out between March and June 2010 – hasn’t yet closed but Ron Wheatcroft, technical manager at Swiss Re Life & Health, is confident that the industry will communicate
sufficiently with the FSA to produce a satisfactory outcome.
He says “We need to make sure the combination of the earlier consultation on group personal pensions and the current consultation doesn’t
leave the market facing uncertainty. If, for example, we are required to disclose charges on some schemes accompanying pensions but not
on others it would be a bit messy. We need to get clarity from the FSA that group risk won’t be subject to the RDR, and I’m optimistic because, although they’ve popped in references to group risk, they’ve never developed them.”
Wheatcroft says that flexible benefit protection cover is generally written as a commercial contract and should be treated the same way asgroup risk. But he acknowledges that advice on flex schemes that is being given to employees – as opposed to employers – does carry a risk of being included under the RDR.
EXPERT VIEW THE NEW AMII EXAM
The AMII exam, launched at the body’s AGM this April, focuses on PMI, dental insurance and cash plans and also includes enough
information about income protection, critical illness cover and life cover to provide an understanding of what customers are alluding to in these areas so that they can be referred elsewhere. Unlike the original CII healthcare module, which focused very much on the nuts and bolts of
products, the new exam also incorporates material about fact finds and health questioning and about the roles and responsibilities of intermediaries and insurers.
AMII’s Michael Payne says “There is quite a lot of content in the course book around underwriting and product benefits, including many terms that apply to group schemes. So I think it will increase involvement in the group market. IFAs tend to be comfortable with exams so a few who dabble in PMI will take a look at it and either sit it or decide that it’s too complex and that they need to refer PMI business to a specialist.”
Although AMII eventually intends to insist that all its members pass the exam, Payne is keen to stress that it will be reasonable with timeframes because it is highly aware that it may not be commercially feasible for all.