Advisory on CBTT Regulations & Continuous Professional Development (CPD)
Insurance Act, 2018 – Continuing Professional Development
Under Section 119 (1) of the Act, a certificate of registration shall not be renewed if the sales representative, agent, broker or adjuster to whom it is issued has not complied with the Continuing Professional Development (CPD) requirements.
What are the CPD Requirements?
A sales representative, agent, broker or adjuster must complete any of the following activities:
| CONTINUING PROFESSIONAL DEVELOPMENT ACTIVITY |
Study/Sit an Exam or Course:
|
Attend:
|
Teach/Lecture:
|
Undertake:
|
Author/Co-Author:
|
Research (Industry Forum):
|
A sales representative, agent, broker or adjuster must attain the minimum CPD Hours each CPD Year in the following categories:
| CATEGORY OF INSURANCE BUSINESS | LIFE (Minimum 4 CPD Hours) |
| GENERAL (Minimum 4 CPD Hours) | |
| ETHICS | (Minimum 4 CPD Hours) |
| LAW AND REGULATIONS | (Minimum 2 CPD Hours) |
| OTHER | (Minimum 2 CPD Hours) |
What are CPD Hours?
Under According to IRR 2 (1) a CPD Hour is the time spent attending or completing a CPD activity. It reflects the amount of time spent on a learning activity. It should be noted that one hour spent on CPD activity may not necessarily equate one CPD hour.
What is a CPD Year?
A CPD Year is each twelve-month period beginning on the date of registration, or renewal of registration of a sales representative, agent, broker or adjuster, after the commencement of the Act (IRR 2 (1)).
NOTE:
Holders of only a Life License must earn a total of 12 Hours within their CPD reporting Period
Holders of only a General License must earn a total of 12 Hours within their CPD reporting period.
Holders of both Life & General Licenses must earn a total of 16 Hours.
A sales representative, agent, broker or adjuster should acquire CPD hours within the twelve-month period beginning on the date of registration, or renewal of registration.
Amendment to the Registration Process for Provisional Certificates – Insurance Sales Representatives
Kindly see Circular Letter from the Inspector of Financial Institutions Ref: CB-OIFI-2621/2020 re Amendment to the Registration Process for Provisional Certificates – Insurance Sales Representatives.
Amendment to the Financial Statements of Intermediaries
Kindly see Circular Letter from the Inspector of Financial Institutions Ref: CB-OIFI-2627/2020 re Sections 136-139 (1) of the Insurance Act 2018 (As amended) – Financial Statements of Intermediaries
Amendment to Administrative Fines – Insurance Companies & Intermediaries
Kindly see Circular Letter from the Inspector of Financial Institutions Ref: Section 260 of the insurance act, 2018.
COMPLIANCE WITH SECTION 128 (1) AND (2) OF THE INSURANCE ACT 2018
Kindly see Circular Letter from the Inspector of Financial Institutions.
Under Section 117 (2) (a) a certificate of registration shall not exceed three years from date of issue. “So why as of 1st January 2021, have Sales Representatives license renewal fees been increased by 100% for a one year period and not three years? Or prorated for that period?
1. The length of registration is at the discretion of the Central Bank.
2. All licences for intermediaries will be granted for one (1) year only in the first instance.
3. Licence fees are to be paid annually regardless of the length of the period of registration granted.
4. Based on 1, 2 and 3 above a prorated period is not applicable for the payment of fees.
Can a sales representative be contracted by an Agency and the Insurer at the same time?
112 (2) An individual shall not be registered with more than one agency or insurer under the same class of insurance business at any particular time. Therefore, Yes. A sales representative can be contracted by an insurer for a class/type of insurance business and an agency for another class/type of insurance business.
112 (5) Where an individual wishes to be registered as a sales representative of more than one insurer or agency, provisions of Section 129 (3) shall apply mutatis mutandis and the individual shall make a separate application in respect of each insurer or agency.
See also the conditions under Section 129(3) – See page 213 of the IA, 2018.
An agency/branch manager defined by his/her contract that has sales representatives working with his/her agency and these agents are contracted by the insurer. Should these Agency/Branch Managers now register as Agencies with CBTT? And if so should their sales representatives be contracted under the agency and not the insurer?
1. If an Agency/Branch Manager has an Agency/Branch then that agency need to beincorporated and registered with the Central Bank.
2. The Agency then needs to have at least one (1) individual agent registered with the agency.
3. Sales representatives that represent the agency then needs to be registered with the Central Bank under that Agency for which they represent.
NOTE
(a) The Agent – defined as an individual employed by an agency to solicit applications for insurance or negotiate insurance on behalf of the agency;
(b) The Agency – defined as a company appointed by an insurer and registered under Part IV to carry on the business of an insurance agency, i.e., the company with which the insurer has the agency contract;
(c) The Sales Representative – defined as an individual who is contracted by the agency to
solicit applications for insurance or to negotiate insurance on behalf of that agency.
Are Agency/Branch managers going to be exempted from filing statements of CPD returns when renewing their license? Since they have done many professional development course over the years to attain that position and still do so annually via sales congresses, sales seminars, company training programs, MDRT and Life insurance Management seminars
1. CPD is a requirement for sales representatives, agents and adjusters.
2. If the agency/branch manager is registered as one of the intermediaries in 1 above then they will have to fulfil the CPD requirements which includes the submission of annual returns.
3. Training done in the past is not considered CPD.
4. CPD is a continuous, on-going, structured requirement managed by the TTII for the purpose of ensuring that registered persons are knowledgeable and kept current in respect of the information required for the sale of insurance products.
Why would an agency/branch manager who’s already incorporated and accustom to filing all his documents inclusive of audited financials each year now have to re- register as an agency rather than just submit his renewal form, the new fees and relevant documents?
This is a one-time request by the Central bank to ensure that all information in keeping with the new registration requirements under the Act for an intermediary is captured. This is a request for all classes of intermediaries.
Can an Agency and Agent be one of the same meaning as an agency/branch manager and also an agent for an insurer? Please clarify?
No. This has been clarified in the new Act. An Agency is now defined as an incorporated body appointed by the insurer and registered with the Central Bank, while an agent is an individual that can only be contracted by an Agency.
Would an individual renewing their license now have to submit a CPD return for career development done in 2020 or would the filing of this return commence in 2022 based on career development done in 2021 only?
1. CPD will commence 12 months after January 1, 2021 (commencement) which will be January 1, 2022. In accordance with Regulation 12 (4) of the Insurance (Intermediaries) Registration Regulations 2020.
2. During 2022 the relevant intermediaries are expected to complete 12 CPD hours in that CPD year.
3. In accordance with Regulation 14, intermediaries have until (or up to) the 12th month to complete, except those that are renewing before the 12th month. They will be required to complete the required CPD hours prior to the submission of their application for renewal.
NOTE
CPD Returns are due upon the intermediary’s renewal in 2022. As such, Intermediaries whose renewals are within the beginning of 2022 may be required to commence CPD activity after January 1, 2021, to ensure that 12 CPD hours are completed prior to their 2022 renewal.
If an individual was granted a provisional certificate of insurance and due to sickness or maternity or death of an immediate family member was unable to sit the license exams can they be granted a one year extension of their provisional license?
1. Provisional licenses for sales representatives may be granted for up to three (3) years at the discretion of the Central Bank and based on reasonable criteria for not meeting the examination requirements similar to those stated in the question.
2. However, each application will be dealt with on a case by case basis on its own merit as renewal is not guaranteed under any circumstances.
Can a Sales representative have a call card stating they are a Financial Advisor? If so what would CBTT deem to be the correct qualifications for it?
1. The term financial advisor is at odds with the role and function of a sales representative by its definition.
2. Preferentially, persons should be advertised as sales representatives since the person is not registered with the Central Bank as a financial advisor.
3. Financial Advisors complete qualifications by an internationally recognized body and are involved in a more comprehensive view of a client’s situation to work towards their goals.
4. Agents and sales representatives are typically more focused on determining a client’s needs that their insurance products can address and on behalf of an insurer, brokerage or agency, whereas a financial advisor works on behalf of a client.
Agency/Branch Managers have Unit Managers as part of their Agency/Branch composition and part of their job is to help recruit and train new agents to help build the Agency/Branch but they all report direct to their Agency/Branch Managers so would these Unit Managers continue to renew their license as Sales Representatives or do they have to change that and re- register under another level?
1. If Unit Managers function as employees of Insurance Companies in respect of training agents and sales representatives for different agencies, then it would be advisable that they registered as sales representatives of the insurer in order to ensure that they meet the minimum requirements of knowledge, education and continuous development in order to fulfil their duties.
2. If Unit Managers function as employees of the Agency then they should be registered as an agent or sales representative of the Agency for the same reasons as 1 above.
What is the amount of CPD hours required to be completed by intermediaries holding one license with all classes of Business?
1. The required amount of CPD hours to be earned by intermediaries holding one license with all classes of Business is 16 CPD hours
[rcblock id=”22940″]