The Council of Ministers today approved two Royal Decrees that complete the transposition of European directives in the field of insurance. One of them is focused on the minimum training requirements to be able to market policies. Any agent in the sector must prove at least 150 hours of preparation.
The new rule “guarantees that insurance distributors have the necessary knowledge of the products they sell and that they are adapted to the needs of clients, thus protecting the interests of the insured,” the Executive explains in a statement.
The royal decree establishes the initial training and the annual update that all insurance mediation professionals and employees of insurance companies must certify. It affects more than 77,000 insurance agents and insurance brokers, as well as the personnel and collaborators of the aforementioned and of the insurance companies themselves when they intervene in the sale of policies.
The new regulation establishes three training levels:
- They must accredit 300 hours of training those responsible for distribution in insurance companies, safe banking operators and insurance and reinsurance brokers.
- They must accredit 200 hours of training insurance agents and employees of insurance companies who provide advice.
- They must accredit 150 hours of training, employees who only dedicate themselves to informing about products.
As has happened in the financial sector, in which the Mifid II directive required all industry agents to demonstrate a minimum knowledge to be able to sell investment funds and other similar products, the European directive wants to ensure that employees who they sell insurance are sufficiently qualified.
For the accreditation of the hours, the previous certified training will be taken into account and a system of homologation is foreseen for the distributors who are already developing this activity. Likewise, the requirement to maintain continuous training of between 15 and 25 hours per year is established as a novelty.
The other approved Royal Decree modifies various insurance regulations to collect various matters relating to private insurance. One of the most important aspects is the modification of the biometric tables used in life and death insurance, to update them to the evolution of longevity, which will result in a greater solidity in the calculation of technical provisions, will promote the solvency of insurance entities and transparency in the formation of insurance prices.
The tables that were used until last year were already 20 years old, and had not adequately captured the increase in life expectancy. In annuity insurance, for example, the insurer agrees to pay the person money for as long as they live. If life expectancy increases, insurers have to set aside more money to cover this policy.
On the other hand, in risk life insurance, the reduction in mortality means that insurers have to put a little less money to cover this contingency.
The great novelty is that with the new biometric tables the review of life expectancy is done year after year, to make the internal solvency systems of insurers more robust.