In May, the Financial Conduct Authority (FCA) launched a consultation (CP25/12) proposing to scrap the 15-hour annual Continuing Professional Development (CPD) requirement for staff in non-investment insurance and funeral plan firms. The aim is to give firms more flexibility and reduce perceived record-keeping burdens.
At first glance, the FCA’s rationale may seem reasonable. The regulator is not suggesting that staff no longer need to be trained, nor that competence is optional. It maintains that firms will still be expected to ensure their employees have the skills and knowledge to do their jobs. However, the decision to remove a clear, structured minimum, and the associated requirement to document individual training, raises concerns. In seeking flexibility, the FCA may inadvertently open the door to inconsistency, reduced oversight, and a decline in public trust, eroding the work the insurance industry has done to professionalise the sector.
At a time when the FCA is promoting higher standards through the Consumer Duty, this proposal sends an ambiguous message, suggesting that structured training is somehow optional in a regulated sector where poor advice can lead to customer harm. Structured CPD, through the continual development of relevant skills and knowledge, helps build and maintain professional competence in a field where staff frequently engage with complex products, regulatory duties, and vulnerable customers.
A defined minimum helps maintain a baseline and protect consumers from poor outcomes.
The current framework
Since the implementation of the Insurance Distribution Directive (IDD) in 2018, staff involved in insurance distribution must undertake a minimum of 15 hours CPD each year across eight core competencies. These encompass broad areas: the insurance market, policy terms and conditions, applicable law, claims and complaints handling, assessing customer needs, business ethics, and financial competence.
Crucially, the framework is already flexible. Firms are not expected to deliver identical training to all staff. Instead, they must ensure each employee has the minimum necessary knowledge to perform their role effectively. This allows for tailoring based on job function, seniority, and complexity, addressing exactly the kind of proportionality the FCA now claims is lacking.
The proposed removal of the eight knowledge areas from the rules (retaining them only as guidance) risks making CPD too narrow or unfocused. These areas ensure CPD is relevant, comprehensive, and aligned to core job responsibilities. Deleting them from the rulebook weakens the link between professional development and the real demands of roles involved in insurance distribution.
The problem with removing the minimum
By removing the 15-hour requirement, the FCA risks creating a fragmented landscape in which CPD becomes ad hoc and uneven across the sector. While some firms, particularly those aligned with professional bodies such as the Chartered Insurance Institute (CII), may continue to uphold high standards voluntarily, others may cut back. Some smaller firms, or those without mature compliance cultures, are arguably more likely to deprioritise CPD if its importance to the regulator is perceived to be reduced or diminished.
The 15-hour minimum is not excessive. It represents just over an hour a month of development in an environment where even basic errors can lead to customer detriment. CPD should not be viewed as a burden, it is a professional standard, which should be embraced. A defined minimum helps maintain a baseline and protect consumers from poor outcomes.
The CII’s position
The CII has made its stance clear. It supports proportionate regulation but believes CPD is essential to public trust and professional competence. Its own members are required to complete 35 hours of CPD a year, more than double the FCA’s current minimum, and there are no plans to reduce that.
The CII notes the value of structured CPD in setting goals, identifying knowledge gaps, and reflecting on progress. These are not behaviours that ‘learning through experience’ alone can consistently deliver. Regulatory standards should complement, not dilute, this professional approach.
Record-keeping: a necessary part of accountability
The FCA says that general record-keeping obligations will still apply, and that firms must still monitor competence. But removing the specific requirement to log training hours or address defined knowledge areas weakens the framework. It increases the risk of fragmented and inconsistent practices, particularly in firms without a robust and well-defined professional development infrastructure.
Some firms argue that keeping CPD records is burdensome. But this overlooks the value of accountability. The requirement to keep individual records for minimum periods is a basic governance standard. In practice, many firms use digital learning platforms that make recording CPD simple and efficient. Scrapping these requirements risks undermining transparency and weakening firms’ ability to demonstrate compliance.
Respond before it’s too late
Compared to law and accountancy, insurance has often been viewed as the poor relation when it comes to professionalism. Over the decades, with the foundation of CPD, it has worked hard to professionalise itself and build trust with the public. The removal of structured CPD requirements risks undermining that process.
The FCA consultation on this proposal closes on 2 July 2025. All stakeholders, including insurers, brokers, professional bodies, compliance officers, and concerned individuals, should respond before the deadline to make their views known.
