Committee tells brokers to lift breach oversight
Brokers have been urged to step up efforts to identify and report breaches of the Insurance Brokers Code of Practice. The code’s compliance committee is concerned that its annual review shows 59% of code subscribers reported no breaches and 43% noted no client disputes last financial year. “For the insurance broking industry, the code represents norms and expectations that exceed the bare regulatory minimum, challenging code subscribers to achieve a higher standard of service to clients,” committee Chairman Michael Gill said. “Code subscribers that capture complaints and breaches are better placed to identify the root causes of any problems and to improve their service to customers.” The committee wants brokers that have reported no breaches to start reviewing processes including internal frameworks for recording breaches and complaints. The National Insurance Brokers Association (NIBA), which owns the code, says the figures show brokers are looking after clients. “The annual report shows quite small numbers of complaints and disputes involving brokers under the code of practice, and that’s pleasing to see,” CEO Dallas Booth told insuranceNEWS.com.au. “But the committee has also identified some areas of potential improvement, particularly in record-keeping and recording. “NIBA will work closely with the committee to make sure we fully understand the concerns it is talking about and to make sure we are working with our members to make the code… as successful as it can be.” Broker subscribers self-reported 1359 code breaches, down from 1410 the previous year. The number of significant breaches, which may also be handled by the Australian Securities and Investments Commission (ASIC), fell to 17 from 34. Failure to adhere to the code’s standards on buying insurance accounted for 52% of all self-reported breaches. “These breaches were typically the result of late renewal notices rather than the incorrect issue of policy documents,” the committee’s annual review says. “The number of breaches reflects the fact most of the work insurance brokers perform every day relates to buying insurance for their clients.” About 23% stemmed from non-compliance with the law, mostly failure on the part of code subscribers to lodge ASIC forms on time or provide disclosure documents. The number of complaints increased slightly to 1047 from 1026, and about 61% of disputes were resolved within 21 days. There were 300 code subscribers last financial year.