Having worked in various compliance roles (for Scottish Widows, Scottish Equitable and, most recently, Misys IFA Services), my view of compliance is that it should aim to improve organisations – not hold them back.
This is especially true when compliance becomes less about achieving minimum standards and more about best practice.
However, it was not until I sacrificed working for a familiar name to join a new organisation – the PPIAB – that I realised how progressive compliance initiatives, such as Raising Standards, could be.
The prospect of joining a small organisation at the beginning of its life and playing a critical role in its development convinced me that the post of acc-reditation consultant at the PPIAB would be interesting and challenging.
I was also attracted by the somewhat noble but necessary objective behind Raising Standards – to provide customers with a fairer deal to boost consumer confidence and long-term investment.
In those early days, only a handful of brands had started working towards accreditation. Addition-ally, the internal accreditation procedures which, as a small group we formulated together, had yet to be tried and tested.
However, with the first deadline for accreditation set for October 2001, we soon started assessing brands. The brands I had responsibility for were Norwich Union and Scottish Equitable.
The accreditation process is not just about assessing whether a standard has been met or not.
It is about providing on-going PPIAB support and advice that helps brands to improve their performance – by meeting the scheme's tough standards – in a way consumers will appreciate.
Brands, such as Friends Provident which gained accreditation last week, have been encouraged to commit to the scheme regardless of its non-obligatory nature.
Not only do they recognise a return on their investment – for themselves, intermediaries and customers – they also value independent PPIAB advice which is part of the Raising Standards package.
For this reason, some of the scheme's continued success relies on the regular improvement of accreditation services. The scheme's first assessment, which includes accreditation as a key element, is already under way and will be published this spring. The PPIAB will use this document as a guide to developing its services.
A third of the market (by market share) is accredited. Accredited brands are:
Co-operative Insurance Society
November 2001 Prudential
January 2002 Eagle Star, Zurich Life
February 2002 Friends Provident
Meeting the standards
Some of the standards are more straightforward than others because of their prescriptive nature.
For instance, it is easy to check whether a brand has extended its cooling-off period to 30 days.
Other standards, such as the first-year ratio – a new actuarial calculation that measures persistency alongside the cost of surrendering policies early – are farmed out. For this standard, the designated agent is Tillinghast Towers-Perrin.
However, around 90 per cent of accreditation work is subjective, in that we spend most of our time assessing product literature for clarity and comparability.
Guided by requirements set down in the Raising Standards accreditation manual, we check documents for plain language, good layout and consistency. Feedback often provokes discussion and can lead to several rewrites.
The first stage of accreditation is the dry run. This allows brands to submit a cross-section of their product documents – bef-ore the formal application – so that we can advise on necessary changes and help provide strong model documents.
In practice, the dry run has become a more well-used stepping stone than we anticipated and the consultative aspect to our work has evolved naturally.
However, this has not cost us our independence. Liaison at the next stage – the formal application – is normally limited to agreeing changes which are necessary for accreditation to be gained.
Consultation and accreditation are greatly aided by the eRoom, a secure site on the internet which only brands and accreditation consultants can access. It allows brands and the PPIAB to exchange and amend product documents online, saving much time and paperwork.
The third stage of accreditation is the panel. A role reversal occurs at this stage as it becomes the consultant's job – having decided the application meets each standard – to convince a consumer-focused panel of this. The panel is made up of three PPIAB board members who will only accredit the brand if they are totally satisfied with both the quality of the application and its assessment.
The characteristics of the fourth and final stage of accreditation – post-acc-reditation monitoring and annual renewal – are still developing as we have only recently accredited the first brands. However, regular dialogue between ourselves and the brands has, so far, allowed us to operate as stringent standard enforcers.
The industry's commitment to Raising Standards continues. Half the market (by market share) is seeking to gain or keep their accredited status over the next 12 months while some 85 per cent of the market has pledged to seek accreditation in the future.
To mirror this commitment, the PPIAB is visiting brands, running workshops on the scheme and accreditation, and ensuring that intermediaries are aware of how the scheme will help them.
If you are interested in finding out more, please contact us on 020 7799 8585.