Policy on Professional Competence

Background and Purpose

[Insert company name] (the “Company”) conducts regulated business activities as an insurance intermediary. Pursuant to Section 11 of the Danish Act on Insurance Mediation (“LOF”), an insurance intermediary must ensure that all employees engaged in insurance distribution activities possess adequate competencies. Against this background, the Company has established this policy with the aim of ensuring that its employees engaged in insurance distribution maintain and continuously develop the knowledge and skills required under applicable regulations, including directives issued by Finanstilsynet, as well as the Company’s internal requirements.

 

Scope

The Policy applies to all employees who are directly or indirectly involved in insurance distribution, advisory services, or other relevant functions within the Company.

 

Legal Basis

The Company ensures that all employees possess adequate education, experience, and competencies in accordance with applicable regulations, including:

• Bekendtgørelse af lov om forsikringsformidling, LBK no. 337 of 11/03/2022 (“LOF”)
• Bekendtgørelse om god skik for forsikringsdistributører, BEK no. 1779 of 06/09/2021 (“General Good Provisions”)
• Bekendtgørelse om kompetencekrav og krav til godt omdømme for ansatte i forsikringsselskaber og ansatte hos en forsikringsformidler, BEK no. 1607 of 06/12/2024 (“BOK”)
• Requirements established by the Danish Financial Supervisory Authority (Finanstilsynet)
• Requirements imposed by other relevant authorities or business partners

Pursuant to Section 3 of BOK, an employee engaged in insurance distribution must:

1. not have been convicted of criminal offences under Straffeloven (the Penal Code), financial legislation, or other relevant legislation, where such offence may pose a risk that the individual cannot perform their duties in a sound manner,
2. not have filed for or be subject to bankruptcy proceedings, and
3. possess a good reputation, including not having demonstrated conduct that could indicate an inability to perform their role in a responsible manner.

Furthermore, Section 4 of BOK stipulates that the Company must ensure that employees engaged in insurance distribution possess adequate competencies to carry out their responsibilities. The provision also requires that the Company assess the employee’s competencies based on the specific competence requirements relevant to the area of work for which the employee is responsible.

 

Roles and Responsibilities

Management

The Company’s management is responsible for implementing and monitoring this policy, ensuring that appropriate procedures and control mechanisms for competence development are established, and documenting as well as reporting competence development activities to the Board of Directors.

Employees

Each employee is responsible for actively participating in prescribed training and continuing education activities, and for keeping themselves informed of changes in applicable regulations and the Company’s internal guidelines.

 

Fundamental Requirements

Suitability

Employees covered by this policy must demonstrate good repute and personal suitability. This entails that they:

• must not have been convicted of offences that could affect their credibility or professional fitness,
• must not be declared bankrupt or have filed for bankruptcy, and
• must conduct themselves with integrity and sound judgment in their professional activities.

Employees are required to inform the Company of any relevant changes in this regard.

Competence Requirements

All employees engaged in insurance distribution must possess relevant competencies in accordance with BOK, adapted to their specific responsibilities, the complexity of the products they handle, and the customer segment they serve. Competence must correspond to the applicable annex under current legislation and must be documented in accordance with Section 7.2 of this Policy.

[Insert the relevant competences with reference to the annex applicable to the Company’s business activities.]

Examination

Employees of the Company engaged in insurance distribution must have passed the relevant examination within their area of work, as described in Section 5.2. The examination must be successfully completed before the employee begins performing insurance distribution within the relevant area. The examination provider must be approved by Finanstilsynet.

Employees of the Company are required to have successfully completed the examination at Finanssektorens Uddannelsescenter (“FUC”)/Forsikringsakademiet (“FOAK”), which is an approved provider of competence tests in accordance with Finanstilsynet’s requirements.

An employee who has passed an examination but has not engaged in insurance distribution for a continuous period of 3–10 years must successfully complete the latest continuing education examination, see Section 7.1, in the relevant area before resuming insurance distribution. An employee who has passed an examination but has not engaged in insurance distribution for a continuous period exceeding 10 years must retake and pass the relevant examination before resuming insurance distribution.

 

Assessment Upon Recruitment and Supervision

Assessment of Competence Upon Recruitment

The Company must initially determine the category or categories under which an employee’s distribution activities fall. Subsequently, the Company must assess whether the employee meets the applicable competence requirements. Upon recruitment, theoretical and practical knowledge shall be assessed based on documented education and professional experience. An employee must have successfully completed the examination referred to in Section 5.3 in order to perform insurance distribution without supervision.

Work Under Supervision

In accordance with Section 5 in BOK, if an employee has not passed the required examination, they may only perform insurance distribution under supervision. An employee may remain under supervision within the same area of work for up to five years, provided that they make attempts to pass the relevant examination during this period. If an employee chooses not to attempt the relevant examination, they may perform insurance distribution under supervision for a period of three years within a single area of work.

The scope of supervision should reflect the employee’s qualifications and experience. The individual(s) responsible for supervision within the Company must possess the necessary competencies in the relevant area and must have the skills and resources to act as a competent supervisor. Documentation of supervisory responsibilities must be established and maintained and be available for review.

 

Continuing Education

Examination

Once an employee has passed the initial competence examination under Section 5.3, they must pass a continuing education examination every three years in order to continue performing insurance distribution within the relevant area of work. The Company uses FUC/FOAK as a provider of continuing education examinations. FUC/FOAK is an approved provider, authorized by Finanstilsynet in accordance with regulatory requirements.

The continuing education examination must correspond to 45 hours of continuing education and is intended to ensure that the employee continues to possess the necessary competencies within the areas of work in which they are active. Furthermore, the examination must ensure that the employee remains up to date with new regulations and practices relevant to these areas of work.

If the employee fails to pass the continuing education examination within three years of having passed the initial competence examination, they may only perform insurance distribution under supervision.

An employee who fails the continuing education examination three times may only retake an equivalent examination one year after the most recent attempt.

If an employee does not pass the continuing education examination within the five-year period during which they are under supervision, they must successfully complete the relevant competence examination under Section 5.3 before resuming insurance distribution independently.

The Company’s Responsibilities

The Company must maintain a record documenting which employees possess competencies in accordance with this Policy.

The Company is responsible for verifying that its employees engaged in insurance and reinsurance distribution have passed an examination demonstrating their competencies within their area of work. The Company must ensure that employees have successfully completed the examination before they are permitted to perform insurance distribution within their respective area of work.

 

Monitoring and Follow-up

The Company shall continuously monitor and follow up on the competence and performance of employees engaged in insurance distribution. This includes ensuring that all employees meet the requirements set out in this Policy, participate in required training and continuing education, and maintain up-to-date knowledge of applicable regulations and internal guidelines.

The Company shall maintain records of monitoring activities, including completed examinations, continuing education, and any supervisory arrangements. These records must be available for internal review and for inspection by Finanstilsynet upon request.

The Company is responsible for taking appropriate corrective actions if deficiencies are identified, including additional training, supervision, or reassessment of competencies, to ensure that all employees comply with regulatory and internal standards.

 

Review and Approval

This Policy shall be reviewed at least annually and updated as necessary, for example in response to changes in regulations. The Policy is adopted by the Company’s Board of Directors.

 

Responsibility for Record-Keeping and Documentation

Responsibility for maintaining records and documentation of competence examinations and continuing education lies with [Name/Function].