With only 8 weeks left before the cut-off date for level 1 exams, we turn our attention to the next level of REs. The article below appears in the latest (April 2012) edition of FANews. We inserted further elucidation in italics where deemed necessary.
What you need to know about RE Level 2
Professional Development Manager
The Insurance Institute of South Africa
There is great confusion around both the intention and content of the Level 2 Regulatory Examinations (RE). To date we know that all representatives (and key individuals, where applicable) will be affected by these exams in some way. What is unclear is how?
The decision to implement REs followed lengthy consultation between the Financial Services Board (FSB) and various industry stakeholders. After the decision was taken the industry requested that the FSB publish the criteria for each of the exam categories.
As the FSB did not have the expertise to design all of the exam criteria it approached industry to participate by way of product category workgroups. These workgroups were tasked with designing and agreeing criteria to focus on what the FSB could regulate in each product category. The purpose of the workgroups was two-fold: First, to set the exams… And second, to consider qualifications (and whether qualifications submitted to the FSB were relevant to the industry).
The FSB and their qualifications committee conceded that certain qualifications covered the regulatory exam criteria for some of the product categories. It was decided that any qualification covering at least 80% of a regulatory exam criteria would be marked as “S” for Specific. A person with said qualification would be exempted from having to complete the regulatory exam in question.
It was hoped that once the FSB published its criteria the training providers (or qualification designers) would amend their programmes and curricula to include 100% of the regulatory exam criteria for a particular product category.
The qualifications process was then amended, requiring anyone who sought a specific rating for a particular qualification to map the curriculum with the product category specific criteria. Upon successful application to the FSB this qualification would receive an “S” specific rating, allowing ongoing exemptions from the particular regulatory exam. (All of the qualifications submitted and rated by the FSB are listed at www.fsb.co.za).
What does this mean?
Where representatives have obtained a qualification that is recognised by the Registrar as specific to a product category or categories, such representatives can be exempted from having to write the examinations for the product categories that the qualification has been recognised for. If the qualification includes and covers the qualifying criteria sufficiently there is no need for the candidate to complete an examination.
Such exemption can only apply if an individual has completed the qualification, and will not apply to those who have credits towards (or have partly completed) a qualification. An individual must have a completed (approved) qualification or write the relevant Level 2 RE.
Please note that only qualifications recognised by the FSB and appearing on the list mentioned above, will be considered.
The FSB identified a number of qualifications that are relevant to the industry, such as Bachelor of Commerce (B Com) and other tertiary qualifications. Because these degrees do not cover any single insurance product category (per the regulatory criteria) they are given a generic status (G) by the FSB.
The FSB requires individuals with generic degrees to complete the relevant Level 2 RE to allow them to perform their regulatory functions of giving advice or performing an intermediary service within the relevant product category.
There is a level 2 regulatory exam for each licence category. In the event that you are licensed for multiple categories, you will be liable to write an RE for each category, unless you obtained a recognised “S” qualification as outlined above. By way of example, those who are licensed to write both personal and commercial lines of short-term insurance, will have to write both short-term Level 2 REs if not in possession of the right qualification.
The FSB is currently focusing on the level 1 REs, and indicated that it would provide more details regarding level 2 once the level 1 process nears completion. The Inseta website (www.inseta.org.za) contains study material for certain licence categories.