During the year, our industry faced many challenges from proposals put forward by governments and regulators.

Savings

First, there is continuing pressure to abolish commissions across most areas of financial services and advice. The FOFA legislation abolished commissions in many areas; and introduced comprehensive statutory duties to act in the best interests of the client and to always manage potential conflicts of interests in favour of the client.

NIBA was able to show that the concerns giving rise to these reforms did not arise in general insurance broking. The result? There were no changes to commission payments in general insurance.

Then, there was the issue of industry funding of ASIC. Late last year the Federal Government issued a proposed model for industry funding of the regulatory functions of ASIC. This would have cost industry, including insurance brokers, around $90 million a year.

The annual cost of an AFS licence from ASIC for brokers could have risen from around $800 to as high as $11,000 – a direct hit to our bottom line.

NIBA and others showed the government the proposed model would not work, and it has been withdrawn… for the time being.

Another big ticket issue that would have hit brokers hard was the prospect of having to complete a university degree and serve a graduate year prior to being able to deal with clients.

Under this proposal, brokerages would have had to fund the cost of their staff to do a university degree to be able to deal with clients. The estimate of this cost would have been a staggering $28,000, plus the opportunity cost of staff time spent away from the office to actually study which potentially could be at least one day a week for three years – times the number of brokers in your office. So, if you had five brokers, that equates to $140,000 plus lost productivity; if you had 10 brokers, it equates to $280,000 plus lost productivity; and so it goes on.

But it didn’t happen.

General insurance won a carve-out from this requirement because NIBA was able to show that brokers had a clear education path to achieve and maintain the right to claim to be a Qualified Professional Insurance Broker.

Take a moment to reflect on what legislative interference and costs we would have in our business today if it weren’t for NIBA.

NIBA was also able to demonstrate, using FOS statistics, that there were no systemic issues regarding brokers and again there were no concerns at all being expressed about the quality of advice from and performance of insurance brokers.

These are only some of the battles that NIBA has fought on behalf of brokers.

And a big part of the reason that none of these things have happened is because NIBA has been there to represent your interests, and to argue on your behalf against any proposals that will have a detrimental impact on your business and your clients.

When you look at it in these terms, it makes your NIBA membership fees look like pretty good value.

While most of us don’t think about it often, I would ask that you take a moment to reflect on what legislative interference and costs we would have in our business today if it weren’t for NIBA.

Not over yet

None of these things ever really go away. They keep coming back. They keep getting raised, and in fact some are still on the government’s agenda.

There is no doubt many of the proposals can and will affect insurance brokers. So NIBA’s work is constant and it is ongoing.

For example, the NSW Government announced the abolition of the Emergency Services Levy from 1 July 2017. NIBA met with the NSW Treasurer, Treasury officials and the Deputy Insurance Monitor. We were instrumental in developing the agreed approach for brokers during the phase-out period and have provided a detailed report to members on their obligations and responsibilities. This has translated to large savings in premiums for your clients.

NIBA is your voice and I can assure you NIBA is fighting every day to make sure you are heard.

Robo-advice was another issue that we had to face. NIBA has provided strong submissions to ASIC in response to proposals to accommodate disruptive business models in financial advice. NIBA has argued strongly for a level playing field between existing and new business models and we will continue to monitor developments in this area.

We also had the fallout from the financial system inquiry to deal with. The inquiry recommended new legal obligations on manufacturers and distributors of financial products, including insurers and brokers. NIBA has discussed this issue with the Minister, and will monitor very carefully any new proposals which would put legal duties and obligations on insurance brokers.

We fought against greater powers for ASIC. NIBA will be watching very carefully when the government releases its proposals in this area.

As you can see, in this year alone, NIBA’s work has potentially saved us and our clients from additional costs, red tape and over-regulation. Not to mention, increased ASIC licensing fees of up to $11,000 that could have hit our bottom line, or the over $28,000 plus lost productivity per broker if we had to complete a university degree and serve a graduate year before being able to deal with clients.

Governments, of course, tend to be more concerned with what happened yesterday than they are with tomorrow. NIBA’s role, as your industry voice, is to constantly remind government of the importance of forward thinking and to caution them against being reactionary.

That is not easy.

The problem we face as an industry is that governments and the people that work in them do not understand or value what you bring. And what you give back to the community.

Now more than ever, it is crucial that we have your support to argue your case, tell your stories, and explain to government, Members of Parliament, regulators and others that general insurance brokers are inherently valuable to Australians and the Australian economy and that NIBA brokers are good and honest people.

NIBA is your voice and I can assure you NIBA is fighting every day to make sure you are heard.

That is what we do.

Editor’s note: This is an edited version of the President Graham Stevens’s opening speech at the 2016 NIBA Convention.