The Financial Conduct Authority has published proposed rules on complaints handling and professional indemnity insurance as part of its insurance directive.
In the first of its two consultation papers on the Insurance Distribution Directive, the financial watchdog has said intermediaries must complete a minimum of 15 hours CPD.
Firms must also keep records to ensure employees are competent, which the FCA said would reduce the likelihood of mis-selling insurance products.
The directive also looks to introduce tougher minimum requirements for PII, and said intermediaries and insurers must have a process to register and respond to complaints.
The IDD looks to consolidate the existing rules of the Insurance Mediation Directive, which was introduced in early 2005 to encourage competition between insurance firms.
The IDD will apply more broadly than the existing directive and bring consumer protection rules in line with those in other financial markets.
Christopher Woolard, executive director of strategy and competition at the FCA, said: "This directive is a significant piece of legislation with implications for the insurance industry as a whole.
“Many of the changes extend UK standards to other parts of the EU and where domestic provisions already exist we will seek to minimise the disruption to UK firms."
He said the new directive will continue to give insurance customers protection.
The paper also outlines proposed rules for handling complaints, professional indemnity insurance, and the regulatory regime for insurance intermediaries.
Firms must respond to the consultation by 5 June.
UK firms must comply with the new directive by 23 February next year.
The IDD also looks to assist in the administration and performance of an insurance contract after it has been sold.
The second consultation paper, which is set to be published later this year, will include IDD requirements which are yet to be adopted by the EU Commission.
It will also address the FCA’s approach to the conduct requirements for life policies, which are being considered in the light of ongoing implementation of the Markets in Financial Instruments Directive (MIFID) II.
