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Annual Report 2015

2 The Chartered Insurance Institute Annual Report 2015

Governance and structure

Governance of the CIIThe CII is governed by its Royal Charter, bye-laws and Board regulations. The Board is responsible for the overall management of the CII as well as approval of its long-term objectives including membership, educational and commercial strategy and annual operating and expenditure budgets. The Board delegates the day-to-day responsibilities to the CII’s Chief Executive Officer and the management team.

Committees of the Board (the governance structure) exist to provide good quality advice to the Board, undertake aspects of oversight which are delegated to them and otherwise to provide periodic reports as to efficacy and integrity of management’s actions in pursuit of the organisation’s charter and the strategic aims identified by the Board.

The ethos underwriting the governance system is that, in furthering the public interest, the processes and procedures of committees and boards ensure, in so far as is reasonably practicable, that the Institute is governed on ethical principles, that the management supports the Board appropriately, in accordance with the authorities delegated to it, and that undue influence by an individual or a common interest group is capable of being identified and challenged.

The Governance structure summarised below, and which operated throughout 2015, has been in place since 2007. A review of the CII’s Governance structure has commenced, looking to ensure it remains appropriate and relevant in the context of modern corporate life.

The BoardAs the governing body of the CII, the Board is responsible for the strategic direction of the Institute.

The Board considers and approves the CII’s strategic plan annually and both monitors and considers the key risks to the CII’s long-term future, to ensure that the CII remains financially viable and relevant both to the members and employers. The results of the membership and skills surveys, undertaken during the year, are taken into account and inform decision-making in conjunction with other research conducted by the CII, regular monitoring of the macro-economic environment, market conditions and active consultation with the Institute’s staff.

The awarding body activities of the CII are kept under review and the Board oversees the CII’s continued compliance with The Office of Qualifications and Examinations Regulation (Ofqual) recognition requirements. In the year the Board has extensively input into re-engagement with the pensions sector and the consequent development of a relevant membership proposition.

Other significant issues of which the Board has had oversight during 2015 include the Institute’s response to the Government’s “Pensions Wise” initiative; the Institute’s approach to internal and external cyber risk; and the launch and promotion of “Made Simple”, a CII led campaign to help consumers better understand insurance products and jargon. The merger of the Chartered Insurance Institute Hong Kong Ltd with the Insurance Institute of Hong Kong was completed at the end of the year. 2015 also saw the inauguration of a targeted marketing campaign to promote Corporate Chartered Status in the UK.

In addition to new initiatives and the development of long-term strategy, the Board also monitor and review the operational activities and day-to-day implementation of the Strategic Plan by the Institute’s paid staff against the Plan’s metrics.

Finally, the Board unanimously acknowledges the outstanding contribution of the CII’s Chief Executive Dr Alexander Scott who retired in March 2016 after 16 years at the helm and leaves a vibrant Institute in the utmost good health. In February 2016 we welcomed Ms Sian Fisher BA (Hons), ACII, Chartered Insurance Practitioner, as his successor, and extend to her the best wishes of the Board and staff in her new role.

Meeting attendance:

Six Board meetings were held during 2015 and the attendance was as follows:

January 2015 12/12 members in attendance

March 2015 10/12 members in attendance

May 2015 11/12 members in attendance

July 2015 12/12 members in attendance

October 2015 9/11 members in attendance

November 2015 12/12 members in attendance

The Chartered Insurance Institute Annual Report 2015 3

The composition of the Board during the year was:

R. Fletcher ACII, DipPFS, Chartered Insurer President (2015/2016) January 2013 –

J. Moore MBE, ACII, Chartered Insurance Broker Deputy President July 2015 –

A. Mistry OBE, ACII, Chartered Insurance Broker President (2014/15) July 2013 –

T. Woolgrove M Eng MBA, Dip CII President (2013/14) July 2012 – July 2015

R. BeaverMA (Cantab), FCII, Chartered Insurance Practitioner

Council Member September 2014 –

Professor. Dr. R. Callender Smith Information Rights Judge Lay Member December 2013 –

I. CallaghanBA (Hons), ACII, Chartered Insurance Practitioner

Council Member November 2015 –

T. Carroll FCII, Chartered Insurer Council Member September 2014 –

S. Fardon FCII, FCMI, Chartered Insurance Broker Employer Member March 2013 –

D. Smith Chartered Engineer Employer Member October 2015 –

R. Morgan ACII, DipPFS, Chartered Insurer Council Member December 2013 –

R. Webb APMI Lay Member December 2013 –

V. Wilkinson Cert CII Council Member September 2009 – July 2015

Dr A. Scott Chief Executive July 2007 –

D. Garner FCCA Finance Director June 2012 – September 2015

Remuneration of Board and committee membersIndividuals serving on the Board, or a Board committee or sub-committee, typically receive no remuneration for services. Lay members (i.e. not members of the Institute) are paid a small honorarium such that no lay member receives more than £10,000 p.a. for service on the Board or any single committee. All Board and committee members are entitled to reimbursement of reasonable travelling expenses.

Remuneration of executive directors is set by reference to external benchmarking, undertaken by the Director of Human Resources, with external oversight by the Remuneration Committee. The Remuneration Committee is independent of the staff.

Board committeesAll committees are committees of the Board and can act only in accordance with Terms of Reference approved by the Board. As a matter of general practice the Board accepts advice offered by a committee, on the basis of the “comply or explain” principle. Separate committees are established to oversee the various areas of activity, identify specific risks or conflicts, consider problems arising and suggest topics for discussion and or investigation. The committee structure is illustrated below:

Board

RemunerationNominations AuditProfessional

Standards Board

QEAC Disciplinary

Diversity Action Group

Appeals

MASC


Representative CouncilThe Council, as the members’ representative body of the Institute, has the objectives of: ensuring that the CII maintains a proper balance between promoting the Charter’s objectives and the individual needs of the CII’s diverse membership; acting as a forum for the two way dissemination of information between the Institute and its members; and informing and influencing the strategic management of the Institute by contributing the views of the members. The Council may monitor the activities of the Board and may advise it on any matter, whether referred to it by the Board or not.

The Council is made up of Members elected by their respective Local Institute constituencies, plus nationally elected representatives of the Student, Certificate level, Diploma level, Advanced Diploma level and Fellowship communities.

In addition the CII appoints certain ex officio post holders such as the President (who is also its chairman), the Deputy President, the Immediate Past President, Vice Presidents, Past Presidents, the President of the Personal Finance Society, Faculty and Committee chairs and lay representatives (i.e. non Members) whose role is to bring an independent perspective to the proceedings. The composition of the Council during the year is shown on the following pages.

The Representative Council was updated throughout the year on the following subjects and provided feedback on CII projects:

The CII’s Strategic Plan; the work of the Professional Standards Board and its Annual Report; the Government’s Pension Wise initiative and the CII’s role in the training of its advisers; the Chair’s Annual Report on the Qualifications, Examinations & Assessment Committee; the CII’s Member Survey; re-engagement with the Pensions sector; the Corporate Chartered Status value creation/promotion initiative; the Made Simple campaign; and discussion of the CII’s response to the Financial Advice Market Review amongst many other things.

Meeting attendance:

Three Council meetings were held during 2015 and the attendance was as follows:



December 2015 25/37 members in attendance

Appointments from the Board

Chairman Ex officio from 22 July 2015 CII President

R. Fletcher, ACII, DipPFS, Chartered Insurer Deputy President to 22 July 2015

Chairman Ex officio from 22 July 2015 CII President

A. Mistry, OBE, ACII, Chartered Insurance Broker Immediate Past President from 22 July 2015

Deputy President J. Moore, MBE, ACII, Chartered Insurance Broker Appointed 22 July 2015

Immediate Past President

T. Woolgrove, M Eng MBA, DipCII Retired 22 July 2015

Vice Presidents on Council

Vice President R. Reid, ACII, APFS, Chartered Financial Planner, Certified Financial Planner

Vice President E. Grant, BA (Hons) FPFS, FRSA, FinstSMM, Chartered MCSI Chartered Financial Planner, Chartered Wealth Manager

Vice President E. Galbraith, ACII, Chartered Insurance Practitioner

Past Presidents

Past President A. Homer, PGDip, FCII, Chartered Insurer

Past President C. Hanks, ACII, Chartered Insurer

Chairmen of Societies (ex officio)

President – Personal Finance Society

D. G. Thomas, FCIB, FPFS, Chartered Financial Planner Retired 15 September 2015

President – Personal Finance Society

B. O’Ciobhain, APFS, Chartered Financial Planner Appointed 15 September 2015

Committee Chairs (ex officio)

Remuneration R. Fletcher, ACII, DipPFS, Chartered Insurer

Audit R. Hudson, FCII, MBA, BSc (Econ), Chartered Insurer

Disciplinary (Lay) P. Taylor Solicitor (retired)*


* Note the Chairmen of the current Disciplinary and Appeals Committees, P Taylor and M Williams respectively, attend the Council as observers only.


Committee Chairs (ex officio)

Appeals (Lay) M. Williams, FRSM, Barrister*

Qualifications, Examinations and Assessments

J. Robson, (Dr) ACII, PhD, BA (Hons)

Elected Institute Representatives

Scotland A R. Morgan, ACII, DipPFS, Chartered Insurer

Scotland B A. MacMillan, ACII, Chartered Insurer

Anglia A B. Aldous, F.inst.F.P, MILT, Cert CII

Anglia B J. Callaway, ACII, Chartered Insurance Practitioner

North East A S. Robertshaw, ACII, Chartered Insurance Practitioner

North East B A. Jolly, ACII, Chartered Insurance Practitioner

North East C V. Wilkinson, Cert CII Retired 22 July 2015

North East C R. Talbot-Jones, BA (Hons), PGDip, Dip CII Appointed 22 July 2015

North West A A. Parkhurst, ACII, Chartered Insurer

North West B M. Cranny, FCII, Chartered Insurance Practitioner

North West C P. Wilson, FCII, Chartered Insurer Retired 22 July 2015

North West C I. Callaghan, BA (Hons), ACII, Chartered Insurance Practitioner Appointed 22 July 2015

South Central A P. Tunnell, ACII, CertPFS, BSc Banking and Financial Planning, Chartered Insurer

South Central B J. Hart, Chartered FCIPD

South Coast & Channel Islands A

C. Digby, FRSA, Cert CII

South Coast & Channel Islands B

C. Beaton, FCII, Chartered Insurer

Elected Institute Representatives

South Coast & Channel Islands C

R. Ratcliff, DLDC (AMS), FCII, CertPFS, Chartered Insurer

East Midlands T. Hall, BA (Hons), ACII, Chartered Insurance Broker

West Midlands C. Hall, FCILA, FUEDI – ELAE, ACII

South West & South Wales A L. Clarke, Dip CII

South West & South Wales B G. Vanstone, Dip CII

South West & South Wales C J. Hancock, ACII, Chartered Insurance Broker Retired 22 July 2015

South West & South Wales C S. Wilton, Dip CII Appointed 22 July 2015

Northern Ireland L. Gillanders, ACII, Chartered Insurance Practitioner

London A R. Beaver, MA (Cantab), FCII, Chartered Insurance Practitioner

London B J. Peace, FCII, Chartered Insurance Practitioner

London C T. Carroll, FCII, Chartered Insurer

Associated P. Hodson CID, Grad MMII, HDipRM, FCII, Chartered Insurer


Nominations CommitteeThe Nominations Committee gives full consideration to succession planning for members of the Board and identifies and nominates candidates to fill vacancies on the Board, Chairs of its committees and Institute Vice President roles. It also ensures that the processes for appointing people to governance roles are objective, fair and that the most suitable candidates are recruited.

During 2015 the Committee reviewed a list of candidates for the roles of Deputy President 2015/2016 and 2016/2017, taking into account the challenges and opportunities facing the CII, and the skills and expertise required.

The process for appointments to the newly constituted Membership Application Sub-Committee (MASC), the Professional Standards Board (PSB) and the Qualifications, Examinations and Assessments Committee (QEAC) formed part of the Committee’s work in 2015, along with the appointment of a new Nominations Committee member from the Board Members elected by the Local Institutes, and the appointment of an Employee Representative to the Board. Consideration was also given to potential recipients of the President’s award.

A key area of work for the Committee during 2015 was the recruitment of a new Chief Executive. The Nominations Committee’s role was to oversee the implementation of the Board’s agreed recruitment processes by an Appointment Group, members of which were selected by the Committee. This Group was chaired by Chris Hanks (Past President), who was joined by Robert Fletcher (President), Ashwin Mistry (Immediate Past President) and Elaine MacLean, Group HR Director at Legal & General. The Group handled the practical side of the recruitment from beginning to end.

The Appointment Group’s progress was measured against various milestones and appropriate stakeholder engagement was monitored. The Nominations Committee is pleased to confirm the success of the project, through the excellent appointment of Sian Fisher who joined the CII as CEO on 1 February 2016.

The Nominations Committee, and the wider CII, is grateful to the Appointment Group. Its contribution cannot be overstated, involving as it did a great deal of skill and a huge commitment of time by its members.

The Committee also reviewed and made amendments to the Nominations Committee Terms of Reference, the Committee Chair reappointment process, the interview matrix for appointments to the Nominations Committee and the template Letter of Appointment, a version of which is sent to people who become members of the CII’s governance structure.

The composition of the Nominations Committee during the year was:

K. Carlton MA, D Univ., CFCIPD Independent non-executive Chair January 2014 –

R. Fletcher ACII, DipPFS, Chartered Insurer President (2015/16)July 2014 –

J. Moore MBE, ACII, Chartered Insurance BrokerDeputy President (2015/2016)July 2015 –

A. Mistry OBE, ACII, Chartered Insurance BrokerPresident (2014/15)July 2013 – July 2015

R. Beaver FCII, MA (Cantab), Chartered Insurance PractitionerConstituency MemberMarch 2015

Meeting attendance:

Six Committee meetings were held during 2015 and the attendance was as follows:




June 2015 4/4 members in attendance



Remuneration CommitteeThe Committee makes recommendations to the Board in respect of the remuneration and pension arrangements for the executive members of the Board (currently restricted to the Chief Executive Officer and Finance Director) and where applicable to the stipends paid to lay (i.e. non CII member) Chairs and Committee members.

In addition the Committee reviews and makes recommendations on the appropriateness and relevance of the remuneration policy for CII staff in general and approves the design of any bonus schemes and or performance related pay.

There is a standing invitation for the Chief Executive Officer (CEO) to participate in the Committee’s deliberations to the exclusion of any discussion on the remuneration and incentive arrangements for the CEO.

All consideration of remuneration cross references market intelligence gathered from other Chartered and similar membership bodies, studies produced by recruitment consultants and the like and bespoke surveys commissioned from specialist benefit consultants where necessary.

The overall aim of the Committee is for the agreed remuneration policies to achieve a balance between a justifiable level of



attraction or retention and considerations of fairness to individuals, whilst ensuring that policies do not result in excessive rewards or lead to a reward for failure.

Consideration of bonus schemes and performance related pay always reference the need to ensure that any performance measurements based on the financial success of the Institute do not inappropriately encourage opportunism and short-term behaviours.

Within the parameters recommended by the Committee and adopted by the Board, the CEO has discretion on setting individual staff members’ levels of pay, having been informed by each employee’s annual Performance & Development Review (PDR) outcome.

The composition of Remuneration Committee during the year was:

R. Fletcher ACII, DipPFSChair July 2013 – December 2015

A. Mistry OBE, ACII, Chartered Insurance BrokerJuly 2013 – July 2015

J. Moore MBE, ACII, Chartered Insurance BrokerJuly 2015 –

D. Smith Chartered EngineerChairJanuary 2016 –

Meeting attendance:

Two meetings were held during 2015 and the attendance was as follows:



Note – The decisions of the November meeting were ratified at a quorate meeting of the Committee in January 2016. Robert Fletcher as the Institute’s President remains on the Committee, until July 2016, with David Smith assuming the role of Chair from January 2016.

Audit CommitteeThe role of the Audit Committee is to review the integrity of financial reporting and the audit process and to ensure that the CII Group otherwise has sound and effective systems of internal control and risk management.

The Audit Committee’s work cycle begins in March when the first meeting of each year concentrates on the conclusion of the external audit and the recommendation of the Consolidated Group accounts to the CII’s Board for signature and thereafter to the agenda for the Annual General Meeting in July. The Committee was satisfied that as witnessed by the external auditors, the management team had been fully co-operative throughout the process and had produced high quality data for the BDO LLP team. It was noted that prior to the commencement of the audit BDO LLP had confirmed their independence in accordance with the necessary Auditing and Ethical Standards.

Although dominated by the external audit, the meeting was also addressed by the Chief Executive Officer (CEO) who outlined the CII’s Strategic Plan 2015-17 and the Institute’s three main strategies, namely, “promoting the profession”, “the public interest” and “sustainable growth”, as a backdrop to the Committee’s work for the year to come.

The Committee’s July meeting took place just a few days in advance of the Institute’s AGM and concentrated mainly on the Risk Register. It was noted that Finance Director Darren Garner had resigned to join the Saffron Building Society as Chief Financial Officer and CEO Dr Alexander Scott had announced his retirement effective from the end of March 2016. An interim Finance Director would be recruited until a successor to the CEO was in post. The Audit Committee considered that senior staff succession should be given a higher prominence in the Risk Register and highlighted this to the Board due to there being only eight months remaining before Dr Scott’s departure.

The third and final Audit Committee meeting of the year takes place in November. The management team had commenced to the planning process for 2016 albeit that the output would be a high level Operational Plan rather than a full review of the existing 2015/2017 Strategic Plan. This was intended as a holding document pending the appointment of the new CEO. Immediate issues for the new CEO post appointment would be to address the lack of space within the Aldermanbury premises and to give consideration to a permanent appointment for the vacant Finance Director role.

In preparation for the forthcoming external audit, the audit plan and fees were agreed. It was noted that the 2015 year end accounts would be the first prepared under FRS 102, which dealt with revenue recognition.

In updating the Risk Register the Committee noted that the pursuit of Payment Card Industry compliance continued and that as a result the telephony at Customer Service would be replaced.


The composition of the Audit Committee during the year was:

R.O. Hudson FCII, MBA, BSc (Econ), Chartered InsurerChair November 2010 –

C. Collins ACII, BBS (Hons), Chartered Insurance PractitionerMemberDecember 2013 –

M.A. Hind BSc (Hons), DipAcc, CertPFS, CAMemberDecember 2013 –

S. Moore MSC, BA, CMIIALay MemberJuly 2013 –

R. Webb APMILay MemberMarch 2015 –

Meeting attendance:

Three Committee meetings were held during 2015 and the attendance was as follows:




Professional Standards Board (“PSB”)The role of the Professional Standards Board (PSB) is to:

• develop appropriate policy and standards for CII members, including professional conduct and trust, discipline, ethics and competence;

• develop appropriate policy and standards for the CII’s governance including accountability, diversity, consumer representation and transparency;

• monitor and review these standards; to communicate the standards to the members and committees; and

• promote professionalism and the adoption of high standards within the industry, with government, with regulators and most importantly to consumers.

The PSB covered a range of activities in 2015. As part of its normal governance and oversight responsibilities the PSB received reports and presentations from the Disciplinary, Appeals and Qualifications, Examinations and Assessments Committees, the Diversity Action Group and the Accreditation Panel.

On a broader front, the PSB discussed a variety of risks and challenges across financial services including motor insurance, the impact of the pension freedoms reforms and the introduction of Pensions Wise, and the proposed Financial Advice Markets Reforms (FAMR). Discussions were also held on the CII’s plans

to develop support and content for new skills and capabilities for the life and pensions sector, as well as the importance of both conduct risk and focus on individual responsibility in regulation for the financial services sector following the development of the Senior Managers (and Certification) Regime (SM&CR) for banking and Senior Insurance Manager Regime (SIMR) for insurance.

The PSB wholeheartedly supported the CII’s efforts to communicate the importance of the Code of Ethics and to extend the range of related guidance and support. They also oversaw the launch of the revised standards and criteria for Corporate Chartered Status in July 2015.

As part of its wider engagement with other bodies, the PSB invited the Chief Ombudsman of the Financial Ombudsman Scheme to give a presentation and discuss issues of common concern, and fully supports the CII’s activities to speak up and respond to consultations on regulatory matters.

The composition of the Professional Standards Board during the year was:

D Hertzell Independent non-executive Chair2014 –

J Bush ACII, Chartered Insurance Broker

Wholesale Market Representative2009/10 – April 2015

R Callender Smith (Prof, Dr., Judge)

Board RepresentativeJanuary 2015 –

N Hankin BA, ACII, MBA, Chartered Insurer

General Insurance RepresentativeNovember 2015 –

T Hunter MA

Consumer Advocacy RepresentativeApril 2012 –

S Lewis MSc, BSc

Consumer Advocacy RepresentativeApril 2012 –

T McGrath CBE, FCII, Chartered Insurance Broker

Regional Broking Representative2009/10 – April 2015

J Morris Solicitor

Regulatory RepresentativeSeptember 2011 –

C Munn (Prof) OBE

Education RepresentativeJanuary 2013 –

A W Scott (Dr) Chief Executive Officer ex officio2000/1 –

D Thomson MA (Hons)

CEO’s Nominee2007/8 –



Meeting attendance:

Four board meetings were held during 2015 and the attendance was as follows:


April 2015 7/10 members in attendance

September 2015 8/8 members in attendance


The Membership Application Sub-Committee (MASC)The Membership Application Sub-Committee (MASC) is responsible for membership eligibility and was reconstituted in 2014 with the changes taking effect in January 2015. The new Sub-Committee reports directly to the Professional Standards Board and is responsible for screening members who disclose disciplinary action by other professional bodies/regulators, convictions, bankruptcies and other debt arrangements on their application forms. In 2015 there was an increase to 167 applications from 142 applications in the previous year, which reflects the year on year upward trend. The reason for the gradual increase is believed to be the greater emphasis on professionalism and improved understanding of the need to disclose.

The composition of the MASC during the year was:

T. Jones Solicitor

Chair, Lay & Legally Qualified Member 2014 –

J. Elliott Lay & Legally Qualified Member 2014 –

M. Havelock MA, MCIArb, Barrister

Lay & Legally Qualified Member 2014 –

T. McGrath CBE, FCII, Chartered Insurance Broker

CII Member 2014 –

D. Teague FCII, DipPFS, Cert CII (MP), BA (Hons), QTLS, JP

CII Member 2014 –

S. Wilkinson FCII, APFS, Cert CII (MP & ER), Chartered Financial Planner, CFP, Chartered MCSI

CII Member 2014 –

Qualifications, Examinations and Assessments Committee (QEAC)The main purpose of the QEAC is to ensure that CII candidates are treated fairly through application of the qualifications, examinations and assessments quality assurance processes. It also looks at how those processes can be refined and improved. Through doing this QEAC ensures that the CII both maintains its professional standards and integrity and also complies with the requirements of its regulator, Ofqual, which is an independent regulator reporting directly to parliament. It also considers pedagogical developments in the round.

During the year, the Committee received presentations and maintained a general oversight of the CII’s approach to:

• CII Strategy 2015

• Information services

• Coursework assessment

• Financial services qualifications framework

• Finance update

• Assessment systems

• Apprenticeship developments

• Retirement advice

• Life and pensions

• Recognition of prior learning (overseas)

The following standing items were also considered by the QEAC at each meeting:

• Examination Operations: examination statistics (e.g. on entries, re-marks, pass rates, etc.) and performance of examiners, assessors and centres;

• Accreditation: prior learning, corporate and overseas;

• Compliance: the Examination Department’s Risk Register and internal audit reports, breaches and procedures; and

• Customer Services: centre performance and inspections, reasonable adjustments.

One of the key achievements of the Committee was the annual Ofqual Statement of Compliance, which was reviewed and discussed in detail by a sub-group of the QEAC.

The Committee also had oversight of the successful expansion of alternative assessment, and continued to oversee CII’s assessment quality and reputation in overseas markets.

The Committee also undertook the annual self-assessment exercise; overall results showed that QEAC members were satisfied with the Committee and its engagement with the CII’s Educational team, and were keen to become more involved in QEAC’s activities. The Committee also agreed that relevant CII policies undergoing changes would be brought to QEAC’s attention for consideration and/ or information in order to assess whether there is an impact on processes or procedures regarding qualifications, exams and assessments.


The composition of the QEAC during the year was:

J. Robson (Dr) ACII, PhD, BA (Hons)

Chair2012 (2008) –

J. BarronACII, Chartered Insurance Practitioner

General Insurance Representative2010 –

C. BeatonFCII, Chartered Insurer

General Insurance RepresentativeSeptember 2014 –

G. BottriellFPFS, FGS, Chartered Financial Planner

Financial Services Representative2008 – May 2015

B. DartBA (Hons), PGCE

Wider Education RepresentativeJanuary 2015 –

M. DaviesACII, FPFS, Cert SMP, MSc, BA, Chartered Insurer

Financial Services RepresentativeSeptember 2014 –

P. DavisACII, BA (Hons), Chartered Insurance Broker

General Insurance Representative2010 –

T. FaulknerBSc (Econ), MAAT, ACA

Wider Education Representative2013 –

C. LumbMA, BA, PGCE, MIC

Wider Education Representative2012 –

G. MorganACII

Wider Education RepresentativeJanuary 2015 –

P. RaymondFPFS, Chartered Financial Planner

Financial Services Representative2012 –

Meeting attendance:




September 2015 8/10 members in attendance

Disciplinary CommitteeThe role of the Disciplinary Committee is to implement the Disciplinary Regulations and Procedure Rules relating to Disciplinary matters up to the point of appeal; to consider Complaints made against current or former CII students or members; to make available its members to hear Complaints referred to a Panel by a Case Examiner; and to determine any Complaint referred to a Panel, and, where upheld, decide appropriate disciplinary action in relation to the Respondent.

The Committee is composed of CII Members, Lay Members, and a legally qualified Lay Chair. Committee Members are eligible for re-appointment, subject to a maximum of nine years’ consecutive service. All the members of the Committee are unremunerated volunteers. Recruitment is undertaken periodically, under the aegis of the Chairs of the Disciplinary and Appeals Committees.

Hearings are normally held in public, and decisions are normally published in accordance with the Panel’s direction.

A right of appeal on specific grounds lies to an Appeal Panel of members of the Appeals Committee.

Disciplinary Panel decisions and Case Examiner decisions are subject to a periodic review by the Disciplinary Decisions Review Panel (DDRP) appointed by the Appeal Panel to ensure consistency of approach.

In 2015, 202 Complaints were investigated; marginally fewer than the 226 Complaints considered in 2014. The lower number largely reflects the significant drop in plagiarism cases towards the end of 2015. This is the first time for a number of years the number of Complaints has reduced and appears to be a result of improved communications to students around the risk of plagiarism.

There were two hearings in 2015, whereas there were none in 2014. The number of hearings has significantly reduced since Consensual Orders were introduced as a mechanism for resolving Complaints in May 2013.

The Committee meets up to three times a year to review statistics, trends, rule changes, Practice Notes, guidance and policies, and once yearly for a day’s training, which, in 2015, was run “in-house”, at significant cost-saving, in conjunction with the Appeals Committee.

In 2015, the Disciplinary Committee created a sub-group to consider a costs policy in relation to the CII’s disciplinary action against Respondents and was tasked with reviewing a proposed set of revised sanctions to be imposed on Respondents as a result of disciplinary action. The Committee considered, and declined, a proposal to “merge” the Appeals and Disciplinary Committees.

An annual report is made to the Professional Standards Board by the Chair.



The composition of the Disciplinary Committee during the year was:

P. TaylorSolicitor (retired)

Chair, Lay & Legally Qualified Member2011 –

H. ChothiaFCMI, FIC, MBA, MIoD

Lay Member2013 –

A. DarlingFCII, Chartered Insurance Practitioner

CII Member2009 –

P. Harris BA (Hons), ACII, Chartered Insurer

CII Member2012 –

T. Jones Solicitor

Lay & Legally Qualified Member2011 –

S. KearneyLLB (Hons), Solicitor

CII Member & Legally Qualified2010 –

P. Kyle,MBChB, FRCS

Lay Member2013 –

K. MatlinJP, MSc, BSc (Hons), ACII, ACIArb, Chartered Insurer and Chartered Mediator

CII Member2011 –

G. Mortimer, BA (Hons), PGCE, MA

Lay Member2013 –

B. Neaves, BA (Hons), FCCA

Lay Member2011 –

R. Rennison FCII, FPMI, FPFS, CFP Chartered MCSI, Dip IoD, Chartered Financial Planner.

PFS Member2010 –

C. ShewanBA (Hons), Solicitor

Lay Member & Legally Qualified2013 –

P. SmithSolicitor


J. StaniforthFCII, Dip (Comp), MICA, Chartered Insurance Broker

CII Member2011 –

Meeting attendance:

Two Committee meetings were held during 2015 and the attendance was as follows:



Disciplinary decisions:

During 2015 there were 57 cases (2014: 71) where a CII Case Examiner made a determination or agreed a consensual order with a Respondent, analysed between:

2015 2014

Plagiarism 20 25

Providing assignments to another person 18 20

Examination breach 4 7

Other 15 19

Sanctions issued include reprimands, withdrawal of examination or assessment results, withdrawal of designations, suspension of membership or expulsion as well as no case to answer. At least two sanctions are issued in most cases where a disciplinary decision is made.


Appeals CommitteeThe role of the Appeals Committee is, inter alia, to consider appeals against decisions of the Disciplinary Committee and to act as a review or oversight body of the Disciplinary Committee.

The Committee is composed of both CII Members and Lay Members, and a legally qualified Lay Chair. Committee Members are eligible for re-appointment, subject to a maximum of nine years’ consecutive service. All the members of the Committee are unremunerated volunteers. Recruitment is undertaken periodically, under the aegis of the Chairs of the Disciplinary and Appeals Committees.

The Appeals Committee, together with the Disciplinary Committee and Secretariat, has continued to focus on consistency, fairness and transparency throughout all aspects of the disciplinary process. In 2015 it contributed to the introduction of the Institute’s Indicative Sanctions Guidance (intended to assist Disciplinary Panels to arrive at fair, consistent and transparent decisions in cases where a sanction falls to be considered). It also considered a revised costs policy proposed by the Institute and raised concerns with regard to certain aspects thereof.

The Committee meets up to three times a year to review statistics, trends, rule changes, Practice Notes, guidance and policies, and once yearly, in conjunction with the Disciplinary Committee, for a full day’s training. In recent years, that training has taken the form of a moot hearing, involving topical developments in regulatory law or matters identified as being in need of further training. In 2015, for the first time, that training was run “in-house”, at significant cost-saving.

Since the introduction of Consensual Orders (a mechanism which allows for the disposal of complaints without a formal disciplinary hearing) in 2013, the number of matters referred to the Disciplinary Committee for hearing has reduced significantly and in 2015 only two such hearings took place. In neither case did the CII member exercise their right of appeal to the Appeals Committee.

The Disciplinary Decisions Review Panel (‘DDRP’) was established as a sub-committee of the Appeals Committee in 2012 to enhance the Appeals Committee’s oversight of the Disciplinary Committee and the wider disciplinary decision making process (in particular, whether complaints have been disposed of properly under the Laws, Disciplinary Regulations and Rules of the Institute, the Common Law of the jurisdiction, the rules of natural justice and any relevant human rights principles). Thereby it serves to enhance the transparency and effectiveness of the Institute’s disciplinary scheme and increase public confidence in both the Institute and the profession.

In 2015 the DDRP considered one finding of a Disciplinary Panel and seven decisions of the Case Examiner, either to dispose of the complaint under the Consensual Order process or to take no further action with regard to it. In none of those reviews did the DDRP find that there had been any procedural breach or irrational decision, although a number of learning points were fed back to the decision makers and contributed towards the identification of training needs.

In 2015, the Appeals Committee considered a proposal to “merge” the Appeals and Disciplinary Committees. It decided – as did the Disciplinary Committee – that the disadvantages of such a merger (in particular, the public perception of the process) far outweighed any advantages.

The composition of the Appeals Committee during the year was:

M WilliamsFRSM, Barrister

Chair, Lay & Legally Qualified2008 –

L ClarkLLB (Hons), ACII, DipPFS, Chartered Insurance Practitioner

PFS Member & Legally Qualified2011 –

S CockerillQC, Barrister

Deputy Chair, CII Member & Legally Qualified2013 – January 2016

A DeanATT, MA, Mus B CTA, ADIT

Lay Member2013 –

C DepelFCII, Cert PFS, CPCU, LLM & JD, Solicitor, US Lawyer

CII Member & Legally Qualified2010 –

J ElliottBA (Hons), Barrister


M Havelock MA, MCIArb, Barrister


H MawdsleyOBE, JP, DL

Lay Member2008 –

C TilsonACII, MBA, LLB

CII Member2009 –

K TorranceFCII, DMS, MCMI, Chartered Insurance Practitioner

CII Member2012 –

R WealdFCII, Chartered Insurer

CII Member2011 –

Meeting attendance:







Diversity Action Group

The PSB Diversity Action Group is a sub group of the Professional Standards Board. Its role is:

• to raise awareness of diversity issues amongst CII members, committees, management and staff;

• to consider how the CII can become a more inclusive professional organisation and encourage members at all levels;

• to develop appropriate diversity policy and actions for implementation by the CII and to monitor and review these actions to maintain relevance and effectiveness;

• to communicate the diversity policy to CII members, committees, management and staff to encourage the highest possible level of compliance; and

• to advise and be consulted on the CII diversity policy.

During the year, the Diversity Action Group (DAG) received reports on Awarding Body diversity updates, diversity developments in the public domain and diversity developments within the CII. There had been continued dialogue on the breadth and incidence of ‘Reasonable Adjustments’ in the CII’s examinations. DAG was encouraged by the increase in the number of Equality Impact Assessments (EIAs) undertaken within the CII, which had increased as a result of better awareness of equality and diversity within the organisation.

DAG also received presentations from various CII departments highlighting the departments’ roles and responsibilities and how the departments supported diversity. From a membership facing perspective, following earlier discussions, DAG had received a report from the CII executive which highlighted what processes, products and services were already in place for people with caring responsibilities and how the CII supported them.

The Action Group reviewed its Terms of Reference and made minor changes in relation to its reporting responsibilities to the Professional Standards Board. It also reviewed the Diversity Action Plan, acknowledging that the only remaining actions were dependent on improvements to the CII’s IT which were planned for 2016. Many of the original actions had now become ‘business as usual’.

As a result of the progress made since its inception, DAG concluded that the Business Case for diversity was no longer required as the CII Equality Strategy was now in place and information was also included in the Equality & Diversity Guide as well as an Equality Action Plan. DAG was consulted on the Action Plan for 2016 prior to its approval by the Professional Standards Board.

An annual training session was held for all DAG members in October on a variety of issues, including implications of legislative and political change, forthcoming Bills and particular focus on sexual orientation, gender identity and transgender.

Regular reports from the Diversity Champions Group (DCG) were also noted by DAG.

The composition of the Diversity Action Group during the year was:

L. Coyle FCII, FPFS, Chartered Financial Planner

Chair 2011 –

P. GuptaFCII, Chartered Insurer

Deputy Chair2009 –

J. Amory Lay Member2009 –

N. ButtACII, Chartered Insurer

Member2009 –

V. Chinn Lay Member2011 – 2015

B. DesaiBSc (Hons), FPFS, CFP™, Chartered MCSI, Chartered Financial Planner

Member2011 –

J. GilletteACII

MemberJanuary 2015 –

M. MaddocksMA (Cantab), ACII

Member2009 – March 2015

S. Natha Lay Member2009 –

D. TeagueACII, Dip PFS, Cert CII(MP), Chartered Insurance Practitioner

Member2011 –

Meeting attendance:

Three meetings were held during 2015 and the attendance was as follows:

February 2015 5/10 members in attendance



Further details on the CII’s structure of governance and composition of each committee can be found on the CII’s website www.cii.co.uk


Financial Review For the year ended 31 December 2015

Audited financial statementsThe audited financial statements for the year ended 31 December 2015 are included on pages 18 to 37. The financial statements have been prepared in accordance with FRS 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland, which is mandatory for any organisation with an accounting period beginning on or after 1 January 2015. Where applicable, the financial statements have been amended to comply with any changes required by FRS102 and all comparatives for prior years have been re-stated. The main adjustment has been to deferred revenue which has been increased by around £0.9m, reducing net assets by the same amount.

The organisations that comprise the CII Group, and which are included in these financial statements, are listed in Note 6 to the financial statements on page 29.

ResultsIn the year ended 31 December 2015 the CII reported a surplus before tax of £1,994k (31 December 2014: £2,840k).

The net movement on reserves / funds is £5,950k after adjusting for taxation, pension scheme contributions and a valuation gain on the CII’s freehold property.

Membership Total membership at 31 December 2015 was once again a record, standing at nearly 121,700, exceeding last year’s 117,500, fuelled by continued demand for Chartered Status and growth in membership of the Personal Finance Society, which increased by over 1,100 members, ending the year with nearly 36,200 members.

IncomeTotal operating income for the year ended 31 December 2015 was £40.5m, an all-time high reflecting the CII’s prominence in the Insurance and Financial Planning professions. This was an increase of 3.8% over the £39.0m achieved in 2014.

Revenue from membership services and subscriptions increased by £0.5m (3.1%) to £16.7m (2014: £16.2m), with membership numbers increasing from 117,500 last year to 121,700 at the end of 2015. In conjunction with this growing membership, the Personal Finance Society has extended the capacity of its Regional meetings resulting in an increased attendance to 34% of PFS members.

Revenues from qualifications are £11.8m; an increase of £0.6m (5.4%) compared to £11.2m last year. The number of examinations booked increased to around 81,500 from 79,000 in 2014. During the year, there has been a shift from pure exam sales toward sales of qualifications assessed by coursework, dissertations and by mixed assessment, which is a combination of multiple choice and coursework components. These products are sold as a package of educational assessment and learning materials. The key areas of growth are diploma and advance diploma qualifications for both general insurance and financial services.

Revenues from educational activities, comprising textbooks, e-books, other publications and training courses, increased to £11.8m from £11.5m in 2014. There was growth in the elearning products for Broker Assess, Mortgage Assess and Pension Wise (commissioned by the Treasury). There was a decline in Face to Face training partly as a result of a move towards online training and coursework, and partly due to the lower uptake of Broker Academy.

International revenues represented 11% of total revenues (2014: 11%).

ExpenditureTotal expenditure increased by £2.4m (6.6%) to £38.7m (2014: £36.3m). During the year there have been several new undertakings as well as building on current activities. There was significant increased spend in 2015 to further develop and promote three major projects: Chartered status (£0.7m), Made Simple (£0.5m), an initiative to provide simple and impartial answers to the public’s questions concerning insurance, and ‘Life and Pensions’ (£0.3m), which is largely in response to Pension Reforms and the role that Life, Pensions and Long-term savings providers will play in helping customers in their retirement planning.

Staff and technical expertise remain one of CII’s key assets. During the year there was an increase in salary and related costs of £0.8m. This is in part due to a strategy to reduce the reliance on consultancy, and the recruitment of key senior personnel to ensure the CII remains relevant to the industry. A further £0.5m is directly attributable to the increased revenues outlined above. There were a number of offsetting decreases in costs amounting to a net £0.4m.

TaxationThe net corporation tax charge for the year was £188k (2014: £165k). Further details on the tax charge are included in Note 4 to the financial statements on page 27.

PensionsThe CII operated a defined benefit pension scheme that closed to new entrants in 2001 and closed to future accrual in 2006. The scheme is funded in advance by contributions at rates assessed by the scheme actuary in regular funding reviews. The CII and the Trustees of the pension scheme had previously agreed a schedule of future payments following the actuarial valuation as at 30 June 2011, with a contribution of around £100k made in 2015 compared to last year’s £600k, which included a one off additional payment of £500k in December 2014.

An actuarial valuation was undertaken as at 30 June 2014, resulting in no changes to the previously agreed schedule of payments. A contribution of £100k will be made in the year ending 31 December 2016 and in subsequent years’ dependent on the outcome of the next actuarial valuation, which is due to be undertaken with an effective date of 30 June 2017.


Employees who joined the CII since 2001 are entitled to join a Defined Contribution Scheme.

Further details are given in Note 14 to the financial statements.

Cash flowCash and short-term deposit balances at 31 December 2015 were £25.6m (2014: £22.3m). These balances are held in the form of deposits with a small number of UK financial institutions with a range of maturities not exceeding 12 months.

Net cash inflow was £3.4m compared to a £2.4m inflow in 2014 and includes £96k of contributions to the defined benefit pension scheme as described above (2014: £577k). Capital expenditure amounted to £0.2m (2014: £0.4m).

Reserves As at 31 December 2015 total accumulated funds amounted to £36,694k (2014: £30,744k), including a revaluation reserve of £10,005k (2014: £5,739k) in respect of freehold premises.

In planning and budgeting for its activities, the CII considers the level of reserves held in order to strike a balance between the continuing development of its services and the need for prudent management of our working assets and commitments, as well as providing for contingencies. It is the CII’s objective to generate an operating surplus to build and maintain reserves at a sustainable level, taking into account working capital requirements and key risks.

Reserves amounting to not less than six months’ budgeted consolidated expenditure shall be maintained by the CII. The assets representing these reserves may be held in bank deposits and/or longer-term investment accounts managed by competent professionals.

Going concernWe have set out above a review of financial performance and the CII’s reserves position. We have adequate financial resources and are well placed to manage the business risks. Our planning process, including financial projections, has taken into consideration the current economic climate and its potential impact on the various sources of income and planned expenditure. We have a reasonable expectation that we have adequate resources to continue in operational existence for the foreseeable future. We believe that there are no material uncertainties that call into doubt the CII’s ability to continue. The financial statements have, therefore, been prepared on the basis that the CII is a going concern.

Internal controls and risk managementThe Group’s operations expose it to a variety of financial and operational risks. The Board has overall responsibility for managing and mitigating risk, supported by the Audit Committee. Review of the effectiveness of the system of internal control is done on the basis of information and regular reports provided by management and the external auditors.

The system of internal control is designed to manage rather than eliminate the risk of failure. While no systems or processes can

provide absolute assurance against risks, material misstatement or loss, the Board is of the opinion that appropriate systems of risk management are in place throughout the CII.

Risk managementThe leadership team directly controls day-to-day policies and operations and has responsibility for designing, implementing and maintaining adequate systems and processes for identifying, evaluating and managing the significant risks faced by the CII. A register of risks is maintained by individual departments, with risks graded according to likelihood of occurrence and impact. A register of the top strategic risks facing the Group is also maintained on a similar basis and is reviewed as part of the Group’s annual strategic planning process and by the Audit Committee and Board on a twice-yearly basis. In addition, the leadership team review the risk register on a more frequent basis.

As a body accredited by the Financial Conduct Authority (“FCA”) the CII is also specifically required to design, implement and operate control procedures that provide adequate levels of control over acting in the public interest, the issuing of Statements of Professional Standing, the verification of advisers and the provision of information to the FCA as required under their rules. These control procedures are subject to an independent audit carried out annually, with the report findings sent to the FCA and reviewed by the Audit Committee and Board.

Budgets and financial reportingDetailed budgets are prepared as part of the annual planning process for the Board to approve. Management accounts are prepared every month and reviewed by the leadership team and a report on financial performance is presented to the Board, Audit Committee and Council at every meeting, comparing actual results to the approved budget. The annual budget is also re-forecast every month to ensure early action can be taken against any emerging financial risks.

Principal risks and uncertaintiesThe CII’s customers and membership of nearly 121,700 are largely drawn from the UK markets for General Insurance and Financial Planning, both of which are considered as mature markets. Without development into new areas, consolidation or international growth the CII increases the risk that it will not be in a position to address the challenge of continuing to generate sufficient income to allow continued investment in its public interest activities. In the event that additional revenue streams are not developed quickly enough, short-term actions on costs would be necessary.

The threat of renewed economic slowdown coupled with political uncertainty over the June 2016 European Union referendum makes it more difficult to execute plans with certainty and heightens the risks and challenges to the CII as customers defer investment decisions. The core membership also continues to operate against a backdrop of a fast changing regulatory landscape.


Financial Review For the year ended 31 December 2015

A significant reduction in membership, or demand for the CII’s products and services, however so caused, would likely translate into reduced revenues for the CII and require immediate mitigating action to be taken.

StaffThe CII aims to be an organisation where staff members enjoy working and where they feel supported and developed. Members of staff are kept fully informed of the organisation’s strategy and objectives, and individual performance is formally reviewed at least twice a year. Learning and development is an integral part of the staff appraisal process. The CII’s recruitment and selection policy is designed to ensure that we select the best possible candidate for the job, on the basis of their relevant merits and abilities as measured against the requirements of the job. The CII’s commitment to non-discrimination is embedded in its policies, procedures and practice.

The CII has attained and retained Investors in People (IIP) status since 2003 and was awarded “Gold” status in 2011 (re-accredited in 2014), placing it in an elite group of organisations meeting the required standards that measure an organisation’s success in achieving business goals through employee learning, development, involvement and communication

Future plansAs a Royal Charter Body our over-arching purpose is to secure and justify the confidence of the public. In December 2015 the Board approved an Operating Plan for 2016 with the focus being upon continued operational delivery. The arrival of our new CEO in February 2016 gives us an opportunity to carry out a strategic review to ensure we remain relevant for the future.

AuditorsBDO LLP was reappointed as the Institute’s auditors during the year and has expressed its willingness to continue in that capacity.


To the Members of the Chartered Insurance InstituteWe have audited the financial statements of the Chartered Insurance Institute for the year ended 31 December 2015 which comprise the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated and institute statement of financial position, the consolidated cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

Our report has been prepared pursuant to the requirements of the Chartered Insurance Institute’s governing charter and for no other purpose. Our audit work has been undertaken so that we might state to the Institute’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the CII and the CII’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Board and auditorsThe Board’s responsibilities for preparing the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out below:

The Charter and Bye Laws of the Chartered Insurance Institute require the Board to prepare the financial statements for each financial period which give a true and fair view of the state of affairs of the CII and of the surplus or deficit for that period. In preparing those financial statements, the Board has:

• selected suitable accounting policies and then applied them consistently;

• made judgements and estimates that are reasonable and prudent;

• stated whether applicable accounting standards have been followed; and

• prepared the financial statements on the going concern basis.

Financial statements are published on the CII’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group’s website is the responsibility of the directors. The Board’s responsibility also extends to the ongoing integrity of the financial statements contained therein.

Our responsibility is to audit and express an opinion on the financial statements in accordance with International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) Ethical Standards for Auditors.

Scope of the audit of the financial statementsA description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeprivate.

Opinion on financial statements

In our opinion the financial statements:• give a true and fair view of the state of the Group’s and the

CII’s affairs as at 31 December 2015, and of its income and expenditure for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the Chartered Insurance Institute’s governing charter.

BDO LLPChartered AccountantsGatwickWest SussexUnited Kingdom22 March 2016

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

Independent Auditor’s Report


Consolidated statement of comprehensive income For the year ended 31 December 2015

Note 2015 2014

£000 £000

Operating Income

Membership services and subscriptions 16,739 16,193

Qualifications 11,810 11,171

Educational activities 11,845 11,499

Other activities 82 125

2 40,476 38,988

Operating Expenditure

Membership services and support 13,414 11,947

Qualifications and learning 16,536 15,345

Central services 8,770 9,010

38,720 36,302

Operating Surplus 3 1,756 2,686

Non operating income and costs

Dividends and interest 141 135

Loss on disposal of assets (1) (4)

Other 106 31

Unrealised loss on listed investments 6 (8) (8)

238 154

Surplus before taxation 1,994 2,840

Taxation charge 4 (188) (165)

Net Surplus 1,806 2,675

Other comprehensive income

Movement on revaluation reserve 13,17 4,266 2,342

Employer contribution to pension fund 14 (96) (577)

Foreign exchange loss (26) (6)

Total other comprehensive income/(loss) 4,144 1,759

Total comprehensive income for the year 13 5,950 4,434


Statement of financial position As at 31 December 2015

Note Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Fixed assets

Tangible fixed assets 5 20,892 17,028 20,890 17,028

Investments 6 91 99 192 192

20,983 17,127 21,082 17,220

Current assets

Stocks – Course books 98 101 – –

Debtors 9 4,609 4,571 5,137 5,278

Cash at bank and short-term deposits 8 25,643 22,283 24,978 21,712

30,350 26,955 30,115 26,990

Current liabilities

Creditors:

Amounts falling due within one year 10 (14,443) (13,097) (27,719) (26,724)

Net current assets 15,907 13,858 2,396 266

Provisions for liabilities and charges 12 (196) (241) (196) (241)

Net assets 36,694 30,744 23,282 17,245

Accumulated funds

General 13 29,857 22,577 23,282 17,245

Charitable 13 6,837 8,167 – -

Total funds 36,694 30,744 23,282 17,245

The financial statements on pages 18 to 37 were approved by the Board on 17 March 2016.

A Mistry Past President

17 March 2016

R Fletcher President

17 March 2016


Consolidated statement of changes in equity For the year ended 31 December 2015

Revaluation reserve

Profit and loss account

Total equity

£000 £000 £000

1 January 2014 3,397 22,913 26,310

Surplus for the year – 2,675 2,675

Movement on revaluation reserve 2,342 – 2,342

Employer contribution to pension fund – (577) (577)

Foreign exchange loss – (6) (6)

At 31 December 2014 5,739 25,005 30,744

Revaluation reserve

Profit and loss account

Total equity

£000 £000 £000

1 January 2015 5,739 25,005 30,744

Surplus for the year – 1,806 1,806

Movement on revaluation reserve 4,266 – 4,266

Employer contribution to pension fund – (96) (96)

Foreign exchange loss – (26) (26)

At 31 December 2015 10,005 26,689 36,694


Consolidated statement of cash flows For the year ended 31 December 2015

Note 2015 2014

£000 £000

Cash flows from operating activities

Surplus before taxation 1,994 2,840

Adjustments for:

Depreciation charges 804 872

Impairment of fixed assets – 475

Unrealised investment loss 8 8

Loss on disposal of current asset investments 1 4

Employer contributions to defined benefit pension fund (96) (577)

Interest receivable (141) (135)

(Increase)/decrease in trade and other debtors (36) 488

Decrease/(increase) in stocks 3 7

Increase/(decrease) in trade creditors 805 (945)

Increase in deferred income 786 403

Decrease in other creditors (367) (654)

(Decrease) in provisions (45) (149)

Exchange losses on translation (26) (6)

Cash from operations 3,690 2,631

Taxation paid (246) (23)

Net cash generated from operating activities 3,444 2,608

Cash flows from investment activities

Purchases of tangible fixed assets (223) (366)

Interest received 139 156

Net cash from investing activities (84) (210)

Net increase/(decrease) in cash and cash equivalents 8 3,360 2,398

Cash and cash equivalents at beginning of year 22,283 19,885

Cash and cash equivalents at end of year 25,643 22,283


Notes to the Financial Statements

1. Accounting policiesa) Basis of preparationThe CII is a body incorporated by Royal Charter. The financial statements are prepared under the historical cost convention, as modified by the revaluation of certain fixed assets, in accordance with applicable United Kingdom Accounting Standards, including Financial Reporting Standard 102 applicable in the United Kingdom and the Republic of Ireland.

These financial statements for the year ended 31 December 2015 are the first year in which the financial statements have been prepared under FRS 102. The date of transition to FRS 102 is 1 January 2014.

The transition to FRS 102 has resulted in a small number of changes in accounting policies compared to those used previously. Information on the impact of first-time adoption of FRS 102 is given in Note 17.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group’s accounting policies.

Parent company disclosure exemptions

In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:

• No cash flow statement has been presented for the parent company; and

• No disclosure has been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the Group as a whole.

The following principal accounting policies have been applied:

b) Basis of consolidationThe consolidated financial statements comprise the financial statements of the CII and all of the entities considered by the CII to be subsidiary undertakings (see Note 6). All have been prepared to 31 December 2015. In preparing consolidated financial statements, the financial statements of the parent and its subsidiaries are combined on a line by line basis, eliminating any intragroup balances and transactions in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

c) Revenue recognitionMembership services and subscriptions

SubscriptionsMembership subscriptions are credited in the financial statements of the period in which they are received to the extent of the proportion of the subscription year remaining, and the remainder in the financial statements of the following period.

Examinations

Examinations & Accreditation Examination and accreditation fees are credited in the financial statements of the period in which the examinations and accreditations take place. Distance learning fees are credited in the period in which learning materials are dispatched.

Educational activities

Coursework & Continuous AssessmentIncome from study options involving coursework submission or continuous assessment is credited to the financial statements on a straight line basis over the length of the study period taken.

Publications and learning materials Sales of hard and soft copy publications and learning materials are recognised in the month of purchase.

E-learning/Licence Fees Sales of e-learning licences are recognised as a sale at the beginning of the licence period.

Training courses, events and conferences Income from sales of training courses, events or conferences is recognised in the period when the course, event or conference takes place. Amounts received in advance are carried forward as deferred income.

Other IncomeDividends and interest receivableDividends and interest receivable are included in the financial statements of the period in which they are receivable. Interest is receivable from short-term, fixed rate deposits.

d) Expenditure recognitionExpenditure is accounted for on an accruals basis and has been classified under headings that aggregate all costs related to the category. Any irrecoverable VAT is included within expenditure with the cost that it relates to.

e) Fixed assets Freehold properties are stated at market value plus subsequent additions at cost and are not depreciated as they are maintained to a high standard, such that the residual value is estimated to be not less than the book value and any depreciation would be immaterial.

Other fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses.


Purchases of other fixed assets are capitalised and depreciated over their estimated useful lives as follows:

Computer equipment 3-5 years

Equipment 5 years

Fixtures and fittings 10 years

Furniture 8 years

Impairment of fixed assets

At each balance sheet date the carrying amounts of fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated and the carrying amount of the asset reduced to the recoverable amount. Impairment losses are recognised in the income and expenditure account.

f) InvestmentsListed investments are stated at mid market value. Gains and losses on remeasurement are recognised in surplus or deficit for the period.

g) Current trade debtors and trade creditorsTrade debtor and trade creditor balances included within current assets and current liabilities respectively comprise items recognised at their transaction price and measured at the balance sheet date at the undiscounted amount of cash or other consideration expected to be received or paid.

h) Foreign currenciesItems included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in ‘sterling’, which is the company’s functional and the Group’s presentation currency.

On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

i) TaxCurrent tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the entity’s taxable operating surplus and its results as stated in the financial statements that arise from the inclusion of

gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis.

j) Operating leases

Operating lease rentals are charged to the statement of comprehensive income on a straight line basis over the period of the lease.

k) Employee benefitsThe Group provides a range of benefits to employees, including quarterly and annual bonus arrangements, paid holiday arrangements and defined benefit and defined contribution pension plans.

(i) Short-term benefits

Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

(ii) Quarterly and annual bonus plans

The Group operates quarterly and annual bonus plans for employees. An expense is recognised in the profit and loss account when the Group has a legal or constructive obligation to make payments under the plans as a result of past events and a reliable estimate of the obligation can be made.

l) Retirement benefitsThe CII operates two types of pension scheme: a defined contribution plan and a defined benefit plan, both of which require contributions to be made to separately administered funds.

Defined contribution schemeFor the defined contribution scheme the amount charged to the statement of comprehensive income in respect of pension costs and other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the statement of financial position.

Defined benefit planThe Chartered Insurance Institute Pension Scheme (1993), a defined benefit scheme for staff, was closed to new members in 2001 and to further service accrual in 2006. Contributions are made to the scheme at rates set by the scheme actuary and as advised by the scheme administrator. Interest costs, return on assets and actuarial gains or losses are recognised as part of non operating activities.

For defined benefit schemes the amounts charged in operating expenditure are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately



in the income and expenditure account if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in the statement of comprehensive income .

Defined benefit schemes are funded with the assets of the scheme. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The resulting defined benefit asset or liability, net of the related deferred tax asset or liability, is presented separately after other net assets on the face of the balance sheet.

m) Stocks Stocks are valued on a ‘first in first out’ basis at the lower of cost and net realisable value.

n) Fund accountingGeneral funds are funds which are available for use at the discretion of Council for the activities of the Institute. Charitable funds comprise unrestricted funds, available for the use of The Education and Training Trust of the Chartered Insurance Institute in furtherance of its charitable objectives, and restricted funds, available for the use of The Chartered Insurance Institute Prize and Educational Funds in furtherance of its charitable objectives.

o) Critical accounting estimates and judgementsThe preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and assumptions which have the most significant risk of causing material adjustment to the carrying amount of assets and liabilities are:

1) Retirement benefitsThe CII accounts for retirement benefits in accordance with Financial Reporting Standard 102 Section 28.9 to 28.28, “Post-employment benefits”. In determining the pension cost and obligation of the defined benefit pension scheme a number of assumptions are used including: discount rate, inflation, salary increases, mortality rates and expected returns on investments. Further details are provided in Note 14 to the financial statements.

2) Provisions for liabilities and charges In accordance with Financial Reporting Standard 102 section 21, “Provisions and Contingencies”, provision is made where the CII believes that, at the balance sheet date, it has an obligation that may require settlement at a future date. The CII is required to estimate the likely future settlement amount based on management’s best view of the most likely outcome. Further details are provided in Note 12 to the financial statements.


2. Operating income

2015 2014

£000 £000

a) Membership services and subscriptions

Membership subscriptions 14,800 13,986

Conferences and event income 1,870 2,080

Other services 69 127

16,739 16,193

b) Qualifications

Examinations income 11,810 11,171

11,810 11,171

c) Educational activities

Publications 5,386 5,315

Other learning materials 4,067 3,576

Training courses 1,374 1,678

Other educational activities 1,018 930

11,845 11,499

Other income 82 125

40,476 38,988


2015 2014

£000 £000

a) Auditor’s remuneration

Audit fees:

Audit of the Group financial statements 85 73

Audit of the Group subsidiaries paid to Associates of BDO LLP 12 16

Taxation and other fees 81 122

178 211

b) Salaries and related costs

Wages and salaries 10,222 9,537

Employer's social security costs 807 784

Employer's pension costs 997 909

12,026 11,230

For key management personnel remuneration see Note 15, Related party transactions.

c) Average number of staff employed during the year

Total employees 225 217

Full-time equivalents 222 214

d) Depreciation

Depreciation of tangible fixed assets 804 872

Impairment of tangible fixed assets – 475

3. Operating result The operating result is stated after charging



2015 2014

£000 £000

Taxation charge on ordinary activities

Corporation tax at 20.25% (2014: 21%) 162 194

Adjustment in respect of previous periods 26 (29)

188 165

The tax assessed for the year is lower than the standard rate of corporation tax in the UK at 20.25% (2014: 21%).

The differences are explained below:

Surplus on ordinary activities before tax 1,994 2,840

Surplus on ordinary activities multiplied by standard rate of corporation tax in the UK of 20.25% (2014: 21%)

404 610

Effects of:

Permanent differences (25) 59

Tax relief for items not taken to profit and loss account (24) (124)

Mutual trading activities (296) (535)

Charitable exemptions 269 206

Other timing differences – (37)

Losses not utilised – 12

Deferred tax not recognised (145) –

Double tax relief – –

Adjustment in respect of previous periods 26 (29)

Effect of other tax rates/credits (21) 3

Current tax charge for period 188 165

4. TaxationThe CII bears tax on its rental, investment and non-mutual income


Freehold land and buildings

Fixtures and fittings

Computer equipment

Total CII only Subsidiary furniture and equipment

Total CII Group

£000 £000 £000 £000 £000 £000

Cost or Valuation

1 January 2015 14,054 3,402 4,619 22,075 370 22,445

Additions 180 75 148 403 – 403

Disposals – – (11) (11) – (11)

Revaluation 4,266 – – 4,266 – 4,266

31 December 2015 18,500 3,477 4,756 26,733 370 27,103

Depreciation

1 January 2015 – 2,859 2,188 5,047 370 5,417

Charge for year – 160 644 804 – 804

Disposals – – (10) (10) – (10)

31 December 2015 – 3,019 2,822 5,841 370 6,211

Net book value

31 December 2015 18,500 458 1,934 20,892 – 20,892

1 January 2015 14,054 543 2,431 17,028 – 17,028

5. Tangible fixed assets

Land and buildings, comprising 20 and 21 Aldermanbury, are stated at market value plus subsequent additions at cost and are not depreciated as they are maintained to a high standard, such that their residual values are estimated to be not less than the book values and any depreciation would not be material. They were professionally valued at £18,500k as at 31 December 2015. The basis of valuation was at open market value for its existing use and was prepared by BBG Real Estate Advisers.



Group

UK fixed interest

UK equities Total

£000 £000 £000

Investments at market value at 1 January 2015 5 94 99

Revaluation to fair value – (8) (8)

Investments at market value at 31 December 2015 5 86 91

Institute

Investments in subsidiaries

Total

£000 £000

Investments at cost at 1 January 2015 192 192

Investments at cost at 31 December 2015 192 192

Investments in subsidiaries 2015

Institute only – Shares in Group undertakings £000

Cost and net book value at 31 December 2015 192

Name of company Principal activity Country of incorporation

Beneficial holding

C.I.I Enterprises Limited E-learning and commercial activities United Kingdom Ordinary shares

The Education and Training Trust of the Chartered Insurance Institute

Education and training United Kingdom Charitable trust

The Chartered Insurance Institute Prize and Educational Funds

Award prizes United Kingdom Charitable trust

The Personal Finance SocietyProfessional body for financial advisors and related roles

United KingdomLimited by guarantee

Chartered Institute of Insurance and Financial Services Private Limited

Sales and promotion of the Chartered Insurance Institute products

India Ordinary shares

Vertical Rainbow Sdn. BhdSales and promotion of the Chartered Insurance Institute products

Malaysia Ordinary shares

The Chartered Insurance Institute Hong Kong Limited (formerly Aldermanbury Hong Kong Limited)

Sales and promotion of the Chartered Insurance Institute products

Hong Kong Ordinary shares

6. Investments


7. Business combinations

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Cash

1 January 7,195 7,879 6,624 7,298

Increase/(Decrease) in cash 2,391 (684) 2,297 (674)

31 December 9,586 7,195 8,921 6,624

Cash balances include £288,514 (2014: £292,674) of cash held by The Chartered Insurance Institute Prize and Educational Funds, the use of which is restricted.

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Short-term deposits

1 January 15,088 12,006 15,088 12,006

Withdrawals – (3,000) – (3,000)

New deposits placed 969 6,082 969 6,082

31 December 16,057 15,088 16,057 15,088

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Total cash at bank and short-term deposits

Cash 9,586 7,195 8,921 6,624

Short-term deposits 16,057 15,088 16,057 15,088

Total cash at bank and short-term deposits 25,643 22,283 24,978 21,712

On 30 October 2015 a merger agreement was entered into between the Chartered Insurance Institute of Hong Kong Limited (CIIHK), a 100% subsidiary of the Chartered Insurance Institute, and the Insurance Institute of Hong Kong Limited (IIHK). The parties agreed to a transfer of the undertaking and assets of IIHK to CIIHK. The asset transfer consisted of the transfer of a cash balance equivalent to £69,619, held in an escrow account at the year end.

This transaction has been accounted for as a public benefit entity combination in line with section 34 of FRS 102. As such, the transfer of assets has been recognised as a gain in the consolidated statement of comprehensive income.


8. Movement in cash and short-term deposits


9. Debtors

10. Creditors: amounts falling due within one year

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Amounts owed by subsidiary undertakings – – 1,093 1,124

Trade debtors 3,192 3,021 3,130 2,946

Prepayments 870 1,106 480 801

Other debtors 494 416 403 379

Accrued income 53 28 31 28

4,609 4,571 5,137 5,278

Accrued income relates to interest receivable on fixed term deposits.

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Trade creditors 2,636 1,831 2,366 1,653

Corporation tax 99 157 2 54

Amounts owed to subsidiary undertakings – – 16,596 16,609

Other creditors 26 28 20 19

Accruals 2,278 2,463 1,582 2,106

Deferred income (Note 11) 9,404 8,618 7,153 6,283

14,443 13,097 27,719 26,724


11. Deferred income

Group Institute

2015 2014 2015 2014

£000 £000 £000 £000

Member subscriptions 5,939 5,605 4,019 3,727

Examination fees 1,659 1,186 1,659 1,186

Other 1,806 1,827 1,475 1,370

9,404 8,618 7,153 6,283

12. Provision for liabilities

Group and Institute Legal and Compliance

Property Total

£000 £000 £000

At 1 January 2015 119 122 241

Provided during the year – 14 14

Released during the year (59) – (59)

At 31 December 2015 60 136 196

Provision for legal and compliance costs relates to amounts set aside to cover legal and other related costs that the CII may be liable for in connection with operations both in the UK and internationally.

Provision for property costs represents the dilapidation costs on the CII’s three leased properties. Costs are based on third party estimates of restoration costs for each of the properties.


13. Accumulated funds: Group and Institute

General Charitable 2015 2014

Revaluation Revenue Unrestricted Restricted Total Total

At 1 January 5,739 16,838 7,779 388 30,744 26,310

Surplus/(deficit) for the year 4,266 3,014 (1,318) (12) 5,950 4,434

At 31 December 10,005 19,852 6,461 376 36,694 30,744

General funds include those of the CII, CII Enterprises Limited and The Personal Finance Society. Unrestricted charitable funds are those of The Education and Training Trust of the Chartered Insurance Institute. Restricted funds are those of The Chartered Insurance Institute Prize and Educational Funds.


14. Pension fund The Institute operated a defined benefit pension scheme which was closed on 30 June 2001. This is a multi-employer defined benefit scheme. The CII is the majority employer of the scheme, with Insurance Institute of London, Institute of Manchester and The Insurance Charities being the other participating members of the scheme. The scheme is funded in advance by contributions at rates assessed by the scheme actuary in regular funding reviews. The scheme assets are held separately from the CII in trustee-administered funds. Following the actuarial valuation at 30 June 2005, the CII agreed with the Trustees to cease accruing for future service with effect from 30 June 2006 and transfer all active members into the CII’s stakeholder defined contribution scheme. The CII makes contributions into the stakeholder scheme at rates between 5% and 20% of basic salary. In addition, a capital contribution of £3m was paid into the defined benefit scheme on 19 December 2005. Following the actuarial valuation at 30 June 2008 the CII agreed with the Trustees to transfer the full outstanding balance in the Escrow account into the scheme and to fund the remaining deficit by equal payments over four years, starting in July 2010.

The pension costs charged in these financial statements have been assessed in accordance with the advice of a qualified actuary based on an actuarial valuation at 30 June 2014 using

the attained age method. The principal valuation assumptions were an investment return pre-retirement of 5.4% per annum and investment return post retirement of 3.7%.

The market value of the scheme assets at the valuation date was £31,200,000 and this represented 102% of the actuarial value of the benefits that had accrued to members.

The actuarial valuation described above has been updated at 31 December 2015 by a qualified actuary using revised assumptions that are consistent with the requirements of FRS 102. Investments have been valued for this purpose at fair value.

The major assumptions used for the FRS 102 actuarial valuation were:

2015 2014

Discount rate 3.90% 3.70%

Inflation assumption (RPI) 3.00% 3.00%

Rate of increase in salaries N/A N/A

Rate of increase of pensions in payment 2.95% 2.90%

Rate of increase of pensions in deferment 3.00% 3.00%

2015 2014

£000 £000

Change in benefit obligation

Benefit obligation at beginning of year 27,287 25,015

Interest cost 1,076 1,204

Actuarial (gains)/losses (1,035) 2,055

Benefits paid (891) (987)

Benefit obligation at end of year 26,437 27,287

Analysis of defined benefit obligation

Plans that are wholly or partly funded 26,437 27,287

Total 26,437 27,287

Change in plan assets

Fair value of plan assets at beginning of year 30,457 28,465

Expected return on plan assets 1,163 1,204

Actuarial gains/(losses) (465) 1,198

Employer contributions 96 577

Benefits paid (891) (987)

Fair value of plan assets at end of year 30,360 30,457



14. Pension fund (continued)

2015 2014

£000 £000

Funded status 3,923 3,170

Effect of surplus cap (3,923) (3,170)

Net amount recognised – –

Components of pension cost

Interest cost 1,076 1,204

Expected return on plan assets (1,163) (1,324)

Interest expense on effect of asset ceiling 87 120

Total pension cost recognised in the income and expenditure account – –

Actuarial (gains)/losses immediately recognised (570) 977

Effect of surplus cap 666 (400)

Total pension cost recognised in the statement of total recognised gains and losses 96 577

Cumulative amount of actuarial losses immediately recognised 5,660 6,230

Weighted average assumptions used to determine net pension cost for year ended: 2015 2014

Discount rate 3.70% 4.50%

Rate of increase of pensions in payment 2.90% 3.20%

Inflation 3.00% 3.30%

Weighted average life expectancy for mortality tables used to determine benefit obligations at: 2015 2014

Male Female

Member age 65 (current life expectancy) 22.4 years 24.8 years

Member age 45 (life expectancy at age 65) 24.2 years 26.7 years


14. Pension fund (continued)

Five year history

Financial year ended 31 December

2015 2014 2013 2012 2011

£000 £000 £000 £000 £000

Benefit obligation at end of year 26,437 27,287 25,015 25,039 22,828

Fair value of plan assets at end of year 30,360 30,457 28,465 26,622 24,766

Surplus 3,923 3,170 3,450 1,583 1,938

Difference between actual and expected return on scheme assets:

Amount 465 (1,198) (1,430) (1,168) 695

Percentage 2% (4%) (5%) (4%) 3%

Experience gains and (losses) on scheme liabilities:

Amount – – – – –

Percentage of scheme liabilities 0% 0% 0% 0% 0%

15. Related party transactionsThe CII has taken advantage of the exemption under Financial Reporting Standard 102 section 33, Related Party Disclosures, not to disclose transactions between Group entities that have been eliminated on consolidation in these financial statements. There are no other related party transactions.

Key management personnel

Key management personnel are defined as the Board and the direct reports of the CEO who have authority and responsibility for planning, directing and controlling the activities of the Group. Total remuneration in respect of these individuals is £1,881,995 (2014: £2,032,878).

Key management compensation

2015 2014

£000 £000

Wages and salaries 1,553 1,670

Employer’s social security costs 203 216

Employer’s pension costs 126 147

1,882 2,033


16. Operating leases At 31 December the Group and the CII had total commitments under non-cancellable operating leases of:

2015 2014

£000 £000

Buildings

Less than 1 year 151 –

2 - 5 years 345 974

496 974

Equipment

Less than 1 year 21 25

2 - 5 years 83 84

104 109

Cars

Less than 1 year 5 2

2 - 5 years 51 60

56 62



Restated statement of financial position

Group Institute

Notes31 December

20141 January

201431 December

20141 January

2014

£000 £000 £000 £000

Accumulated funds (as previously stated) 29,241 27,367 15,742 14,352

Provisions for liabilities and charges 1 – (74) – (74)

Deferred income 2 (839) (983) (839) (176)

Property revaluation 3 2,342 – 2,342 –

Accumulated funds restated 30,744 26,310 17,245 14,102

17. Transition to FRS 102

The Group and Institute have adopted FRS 102 from previously extant UK GAAP for the year ended 2015 and have restated the prior year amounts.

The impact from the transition to FRS 102 is as follows:

1. Holiday pay accrual

As a result of the requirement to accrue for holiday that was earned but not taken at the reporting date, there is a charge of £74,726 to the statement of comprehensive income for the year ended 31 December 2013 (opening balance 1 January 2014), recognising the increase in the holiday pay accrual over the year. This is subsequently reversed in the 2014 Group accounts for FRS 102 restatement.

The 31 December 2014 Group accounts already include the accrual for holiday pay for 2014 of £84,021.

2. Deferred income – recognition of coursework and continuous assessment study fees

In line with the principles of revenue recognition outlined in section 23 of FRS 102, income generated from sales of coursework and continuous study based assessment has been recognised on a straight line basis over the period of the study programme. As a result, for study programmes spanning the reporting period end, deferred income is calculated for that portion of the programme falling into a future period.

3. Property valuation

FRS 102 requires property measured using the revaluation model to be assessed at the end of each reporting period to ensure the carrying amount does not differ materially from its fair value. As a result an estimate of market value as at 31 December 2014 was calculated and the movement in market value recorded in other comprehensive income.

Restated consolidated income and expenditure account

Restated surplus for the year ended 31 December 2014

NoteYear ended

31 December 2014

£000

Total comprehensive income for the year (as previously stated) 1,874

Holiday pay accrual 2013 reversal 1 74

Net movement of deferred income 2 144

Property revaluation 3 2,342

Restated total comprehensive income for the year 4,434


Company numberIncorporated by Royal Charter: RC000104

AuditorBDO LLP2nd Floor, 2 City PlaceBeehive Ring RoadGatwickWest SussexRH6 0PA

Principal bankersHSBC62-76 Park StreetLondonSE1 9DZ

Principal office20/21 AldermanburyLondonEC2V 7HY

Legal advisersCannings Connolly16 St. Martin’s Le-GrandeLondonEC1A 4EE

Leadership team

Chief Executive Sian Fisher

Company Secretary Rowan Paterson

Director of Communications David Ross

Director of Educational Standards Paul Turner

Interim Finance Director Roger Hearn

Director – Financial Services Steve Jenkins FCII & Insurance Markets

Director of Policy and Public Affairs David Thompson

Chief Executive, Personal Finance Society Keith Richards

Reference and administrative details

To download our Annual Report visit: www.cii.co.uk/annualreport

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