Education: Self – Regulation

S Terblanche – Past-President ILASA

It is by now common cause that the FSB has confirmed that loss adjusting activities are not subject to FSB regulation and that the members of The Institute of Loss Adjusters of Southern Africa therefore do not have to be Fais compliant.

Nonetheless, in following the industry norm, ILASA has implemented a self-regulatory system with stringent educational requirements. For this system to function effectively, it is imperative that there is a full buy-in, not only from the ILASA membership, but from the industry as a whole.

The Pitch

Once feedback was received from the FSB that they would not regulate and oversee Loss Adjusting activities, ILASA realised that it would be necessary to implement and maintain a self-regulated system in respect of minimal educational requirements.  This would entail both minimum educational qualifications for the various membership categories as well as a Continuous Professional Development program.

A new entry level minimum requirement was implemented, this at present being a qualification with an NQF3 level rating or Matric.  A proviso to entrance level candidates is that they must, within a period of 5 years from entry, achieve 120 points at a NQF4 level.  Failure to achieve this will result in termination of membership.

In passing, it can be mentioned that although many of our members believe that the entry level qualification is still too low, and while there is a drive to increase the minimum entry level to a minimum of a NQF level 4 qualification, the Government approach and request has been that entry level to any professional-career body should be made easier to assist with the National BEE drive.  Our Executive is at present addressing this conundrum.

Not only did we introduce a new minimum education level requirement, but a Continuous Professional Development evaluation was also implemented. This was something new to the ILASA membership and, initially, there was a firm resistance, especially from the older membership group.

The Sale

The majority of the ILASA members supported a raised entrance level requirement, especially as it was realised that, if one wishes to provide a value-added service to our principals, then our technical expertise level should be such that it will ensure that indeed value is added by making use of a loss adjuster.

Greater resistance was experienced when attempting to implement a CPD program and, for this reason, the focus of the initial roll-out of the CPD program was merely to introduce a program to our members. Achieving CPD points initially was very easily attainable, the focus rather being on ensuring that our members get used to a CPD program, regularly and by the pre-determined cut-off date, complete and return their CPD valuation documentation etc.  Again there was severe criticism from some members that the initial CPD program was not set at a higher technical level.

Nonetheless, the ILASA executive continued to rather focus on selling the idea of a CPD program to all members and not, during the initial phase, focusing on a qualification and technical ceiling for the CPD program which would add to the resistance from members.

Fortunately, over the same time period, there was increased pressure from the Insurance Industry by means of various service level agreements being introduced by several Insurers, insisting that, for the greater part, only qualified members of ILASA be used on the adjustment of their claims.  As non-compliance with the CPD program carried the threat of termination of membership, despite the initial resistance, members soon realised that compliance with the CPD program was inevitable, should they wish to continue to practice as Loss Adjusters.

The Buy-in

As the ILASA Executive stood firm in the termination of membership following annual
non-compliance with the CPD program, irrespective of who the Loss Adjuster was who failed to comply with the requirement, the annual return of CPD valuations by the members increased dramatically, and we annually achieve a return in excess of 95%.

Following the initial buy-in by our members, ILASA have steadily, over the last 2-3 years, “raised the bar” of the CPD program.  Achieving a satisfactory CPD return is now somewhat more difficult than it was a few years ago, however, there is little doubt that the technical level of the CPD program will still have to be raised continually over the next few years.

The first step in this on-going process of ensuring technical compliance by means of a CPD program, was to upgrade the ILASA website.  This is in itself an on-going process.

At present ILASA members can either complete the CPD evaluation by means of the old, manual process or, alternatively, can access the ILASA website and complete the CPD evaluation online.

The initial online process entailed ILASA downloading various technical articles, notes, documents, judgments etc. onto the website and also categorising these into various insurance-technical categories.  The CPD online categories are, however, not only related to insurance technical issues, but also extend to general economic issues, business management issues etc. and candidates are forced, by placing a ceiling on the number of points that can be achieved in each category, to have to access different categories to obtain the required number of annual CPD evaluation points.  The system is also designed to ensure that a member cannot annually access the same categories and/or the same articles for, for instance, reading purposes. Although a member will be able to re-read a specific technical article, points will not be scored for reading such an article for the next 12-24 months.

The online test system will also be improved and within the foreseeable future members will not only be able to achieve points by reading technical articles, but they will also be tested online on technical issues, their understanding of articles read etc.  It is foreseen that the online CPD program will be finalised within the next say 12 months, whereafter members will be compelled to complete their CPD evaluation returns online.

Next Bridge to Cross

When the accredited membership category was introduced 5 years ago, the proviso was, as indicated above, that members who have not as yet achieved the 120 points at NQF level 4 required to retain membership, must do so within 5 years.

This time period lapses at the end of 2011.

Again, it will be required from the ILASA Exco to remain steadfast in the execution of the obligation to terminate the membership of those members who failed to achieve this minimum educational requirement within the 5 year period.

We do believe that with the support of the Insurance Industry, this will be achieved.  As with the roll-out of the CPD program, we believe this will be achievable because of the continuous insistence of the industry in general that only qualified members of ILASA should be used to attend to their adjustments.

The industry is, at the same time, demanding that Loss Adjusters should only be appointed as and when they can add value to a matter.  We believe this is the correct attitude of the Insurance Industry and are in agreement that this can only be achieved by ensuring that our members have a minimum technical understanding of insurance and, also, that our members ensure that they remain up to date with the host of changes in modern IT, legislation etc., without which they cannot provide a value-added service.

Although we remain committed to ensure compliance of our members with a minimum educational level requirement as well as an on-going Continuous Professional Development valuation, this can only be achieved if the Insurance Industry endorses the program and continue to insist that only such qualified Loss Adjusters be used on claim appointments.

Educational self-regulation was forced on ILASA because we were “left out in the cold” by the FSB, nonetheless, we believe it is achievable and can provide satisfactory results, but only if supported by the Insurance Industry as a whole.