Long term care: Advisers welcome plans for new competetence requirements
Long term care (LTC) advisers have welcomed plans by the Financial Services Authority (FSA) requiring all current and future LTC advisers to pass an appropriate examination. The new rules will become mandatory when the regulator comes to power on 31 October 2004.
The rules, which will introduce enhanced training and competence requirements for all LTC insurance advisers and supervisors, will see the introduction of a new LTC insurance examination. All individuals deemed competent by an authorised firm to advise on LTC by 30 October 2004 will be able to 'grandfather' and remain exempt from the exam requirement for a limited period of up to two years. After this time, they will need to have passed an appropriate LTC insurance examination before offering advice.
Dan Waters, retail policy director for the FSA, said feedback received during the consultation period led to the decision to introduce a formal examination.
"Concerns were raised about the need for all advisers, including those already advising on long term care, to demonstrate their competence in this complex and specialist field. We support this view and have decided to require existing long term care advisers as well as new advisers to pass an appropriate examination for long term care insurance," he said.
Graham Fidoe, chairman of LTC adviser body, IFACare, hoped the regulator's decision would help to develop the market. "We welcome the new rules and have been lobbying for regulation of long term care products and advice for some time. We hope it will lead to greater confidence in retirement planning solutions and help move the sector forward by encouraging more advisers and providers to enter the market."
The FSA hopes the new regulations will also lead to greater consumer protection by introducing new claims handling rules and by bringing all LTC insurance products and services under the compulsory jurisdiction of the Financial Ombudsman Service and the Financial Services Compensation Scheme.
The FSA's announcement comes shortly after criticism of continued underfunding was levied at the care home sector. Calculations made by the Joseph Rowntree Foundation said, an additional £1bn a year needs to be pumped into independent care homes in England if they are to reach fully modernised standards.
