Insurance brokers are keeping the market honest

NIBA CEO, Dallas Booth addressed the Annual Conference of the Australian Insurance Law Association in Perth last week, and made a strong case for the professionalism and competence of general insurance brokers.

He spoke about the Royal Commission and the general insurance sector, “There has been a lot of discussion around the failings of the overall financial services sector, but the discussion of possible remedies and reforms is not taking account of the existing insurance laws that protect the rights  of clients.

While the Royal Commission has provided case studies of concern in the general insurance sector, the outcomes for general insurance customers are not in any way close to the systemic examples of poor consumer outcomes that have been revealed in other areas of financial services.”

Booth said the insurance law of Australia is not built upon the core principle of “caveat emptor” – there is a fundamentally different starting point:  the very old principal of “uberrimae fides” – the duty of utmost good faith, which is now entrenched in the Insurance Contracts Act.

Booth went on to explain that recent APRA data indicates the extent to which insurance brokers have acted to limit the impact of commercial price increases in recent years, compared to premium increases in the direct insurance segments.

He said, “Insurance brokers are the marketplace between insurers and customers and their efforts are continuing to ensure clients get the right cover at the right price from the Australian market.”