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FAIS FIT AND PROPER SKILLS PROGRAMMES
The Fit and Proper Determination requires that all Financial Advisors achieve a certain number of credits towards an NQF (National Qualifications Framework) qualification at a specified NQF Level. These are detailed in Column Three of the Competency Tables in the Fit and Proper Determination.
NQF Qualifications are made up of a number of Unit Standards, each of which has a credit allocation. More information on the Qualifications can be found on INSETA’s website
A cluster of these Unit Standards is called a Skills Programme, and the requirements of Fit and Proper specify minimum academic standards of either 12 or 30 credits at a certain NQF Level, depending on the subcategory of business, for an entry-level licence to be granted.
INSETA will in late-February and early-March 2004, through a recognised institution, be conducting a multiple-choice assessment exercise in which Financial Advisors, who do not already have the requisite credits, will have the opportunity to demonstrate their competence at their specified NQF Level. Those found competent will be awarded the relevant 12 or 30 credits, and will have them recorded on the National Learners Record Database (NLRD) which is the official record-keeping system of the South African Qualifications Authority.
INSETA, in consultation with its stakeholders, has singled out suitable clusters of Unit Standards from the registered Insurance Qualifications to make up the 12 or 30 credits, and these will be the Unit Standards around which the assessment exercise will be based.
The following tables detail the Skills Programmes which will be used. Please note that this is for the purposes of this exercise only, and are not prescriptive as to which Unit Standards will be acceptable for being granted credits if they have been obtained in any other way.
However, the selected clusters are a suitable starting point for studying towards an NQF Qualification, and they will also enable our accredited Learning Providers to focus their training programmes on assisting Financial Advisors in achieving the necessary credits.
Category A; Friendly Society Benefits
Definition:
Assistance Policies as defined in the Long Term Insurance Act (Act 52 of 1998).
Column 3minimum academic standards (12 credits at NQF 2)
Compulsory
US No. / US Title / Level / Credit
- Explain the implications of the FAIS Act for employees in financial services organisations
- Apply basic business ethics in a work environment
9344 /
- Understand the nature of the insurance market in South Africa
10718 /
- Use a personal budget to manage own money
TOTAL / 12
Category B
Definition:
The following long term insurance contracts as defined in the Long Term Insurance Act (Act 52 of 1998):
- Risk policies which provide cover in respect of death, disability and health events, and which are not marketed as investment or savings policies;
- Investment/savings policies (including recurring premium retirement annuity policies, but excluding single premium retirement annuity policies and preservation funds) which guarantee a minimum of capital invested at a specified future date or dates, and where such minimum is ascertainable in Rand terms at inception;
- Annuities which guarantee a minimum annuity for the term of the policy which is ascertainable in Rand terms at inception; and/or
- Any policy which combines the policy features included in a), b) or c) above, but excludes policies mentioned in Long-term Insurance Category C.
Column 3
minimum academic standards (12 credits at NQF 4)
Compulsory
US No. / US Title / Level / Credit
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
14315 /
- Demonstrate knowledge and insight into the Income Tax Act (58 of 1962) as amended as it applies to insurance and investment products
14316 /
- Demonstrate knowledge and insight into the Long Term Insurance Act
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14995 /
- Explain the nature of risk and the risk management process
TOTAL / 12
Category C
Definition:
Means single premium retirement annuity policies, policies issued to and/or in respect of preservation funds and other long-term insurance contracts or policies as defined in the Long-term Insurance Act, 1998 (Act No. 52 of 1998), and not specified in Long-term Insurance Categories A and B.
Column 3minimum academic standards (30 credits at NQF 5)
US No. / US Title / Level / Credit
10392 /
- Demonstrate knowledge and insight into the Estate Duties Act (45 of 1955) as it applies to insurance
10393 /
- Demonstrate knowledge and understanding of the primary legislation that impacts on retirement funds
10714 /
- Demonstrate knowledge and insight into legislation relating to marriage, divorce and maintenance as it applies to employee retirement and insurance benefits
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
12185 /
- Demonstrate knowledge and understanding of risk in a financial services environment
14315 /
- Demonstrate knowledge and insight into the Income Tax Act (58 of 1962) as amended as it applies to insurance and investment products
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14519 /
- Determine the needs and wants of an entity at risk in order to propose an appropriate financial solution.
14520 /
- Explain how offshore legislation differs from South African legislation and the implications this has for South African investments.
14535 /
- Differentiate between the different asset classes and indicate how they can be used to meet customer needs.
TOTAL / 31
Retail Pension Benefits
Definition:
“Retail pension benefits” means pension fund benefits provided by retirement annuity and/or preservation pension and/or preservation provident funds.
Column 3minimum academic standards (30 credits at NQF 5)
Compulsory
US No. / US Title / Level / Credit
10393 /
- Demonstrate knowledge and understanding of the primary legislation that impacts on retirement funds
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
12185 /
- Demonstrate knowledge and understanding of risk in a financial services environment
14315 /
- Demonstrate knowledge and insight into the Income Tax Act (58 of 1962) as amended as it applies to insurance and investment products
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14519 /
- Determine the needs and wants of an entity at risk in order to propose an appropriate financial solution.
14521 /
- Present a proposal to optimise the tax aspects of the wealth management of an entity.
14523 /
- Describe the financial lifecycle of an individual
TOTAL / 31
Pension Fund Benefits
Definition:
“Pension fund benefits” means financial products contemplated in paragraph (d) (i) of the definition of “financial product” in section 1(1) of the Act.
Column 3minimum academic standards (30 credits at NQF 5)
Compulsory
US No. / US Title / Level / Credit
10393 /
- Demonstrate knowledge and understanding of the primary legislation that impacts on retirement funds
10714 /
- Demonstrate knowledge and insight into legislation relating to marriage, divorce and maintenance as it applies to employee retirement and insurance benefits
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
12185 /
- Demonstrate knowledge and understanding of risk in a financial services environment
14315 /
- Demonstrate knowledge and insight into the Income Tax Act (58 of 1962) as amended as it applies to insurance and investment products
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14520 /
- Explain how offshore legislation differs from South African legislation and the implications this has for South African investments.
14523 /
- Describe the financial lifecycle of an individual
TOTAL / 31
Participatory interests in one or more Collective Investment Schemes
Column 3minimum academic standards (30 credits at NQF 5)
Compulsory
US No. / US Title / Level / Credit
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
12166 /
- Demonstrate knowledge and insight into the Collective Investment Schemes Act, 45 of 2003 (CISCA)
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14511 /
- Apply technical knowledge and insight into the management of collective investment scheme portfolios.
14516 /
- Describe the life cycle of a unit trust.
14523 /
- Describe the financial lifecycle of an individual
14533 /
- Apply technical knowledge and skill to explain how collective investment scheme portfolios are classified and the implications of the classification system for the investor.
14535 / Differentiate between the different asset classes and indicate how they can be used to meet customer needs. / 5 / 4
TOTAL / 31
Health Services Benefits
Definition:
“Health services benefit” means a benefit referred to in paragraph (g) of the definition of ‘financial product’ in section 1(1) of the Act.
Column 3minimum academic standards (30 credits at NQF 5)
Compulsory
US No. / US Title / Level / Credit
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
12185 /
- Demonstrate knowledge and understanding of risk in a financial services environment
12323 /
- Demonstrate knowledge and understanding of different products marketed by Healthcare Benefits Administrators
12335 /
- Demonstrate knowledge and insight into the Medical Schemes Act (131 of 1998) and the accompanying regulations
14315 /
- Demonstrate knowledge and insight into the Income Tax Act (58 of 1962) as amended as it applies to insurance and investment products
14506 /
- Explain the Financial Intelligence Centre Act, 38 of 2001 and the implication of this act for client relations
14519 /
- Determine the needs and wants of an entity at risk in order to propose an appropriate financial solution.
14523 /
- Describe the financial lifecycle of an individual
TOTAL / 31
Short Term Insurance
Personal Lines
Definition:
Short-term insurance contracts or policies referred to in the Short-term Insurance Act, 1998 (Act 53 of 1998), purchased by natural persons otherwise than in a business capacity.
Column 3minimum academic standards (12 credits at NQF 4)
Compulsory
US No. / US Title / Level / Credit
10194 /
- Demonstrate knowledge and insight into the Short-term Insurance Act (No53 of 1998) and the accompanying regulations
10368 /
- Demonstrate knowledge and understanding of domestic motor insurance
10373 /
- Demonstrate knowledge and understanding of insurance of personal domestic household contents and household buildings
10375 /
- Demonstrate knowledge and understanding of all risks insurance
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
TOTAL / 12
Commercial Lines
Definition:
Short-term insurance contracts or policies referred to in the Short-term Insurance Act, 1998 (Act 53 of 1998), purchased by juristic persons and natural persons acting in a business capacity.
Column 3minimum academic standards (30 credits at NQF 4)
Compulsory
US No. / US Title / Level / Credit
- Demonstrate knowledge and understanding of insurable risk
- Apply technical knowledge and skill in order to manage risk in business interruption
- Describe the operational consequences of incidents and losses on an entity
10194 /
- Demonstrate knowledge and insight into the Short-term Insurance Act (No53 of 1998) and the accompanying regulations
10364 /
- Describe insurance cover against damage caused by riots and acts of terrorism and violence against public authorities in South Africa
10376 /
- Demonstrate knowledge and understanding of Commercial and Industrial, and Corporate insurance in South Africa
10377 /
- Demonstrate knowledge and insight into the Compensation for Occupational Injury and Disease Act 130 of 1993 (COIDA)
10378 /
- Demonstrate knowledge and understanding of the statutory cover afforded under the Compensation for Occupational Injuries and Diseases Act, 130 of 1993, as amended (COIDA)
12164 /
- Demonstrate knowledge and insight of the Financial Advisory and Intermediary Services Act (FAIS) (Act 37 of 2002)
14991 /
- Apply the law of contract to insurance
14995 /
- Explain the nature of risk and the risk management process
15008 /
- Determine risk exposure in order to manage the risk in a specific situation
TOTAL / 30
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