The National Insurance Brokers Association (NIBA) has made a submission on behalf of the intermediated insurance industry to the Australian Small Business and Family Enterprise Ombudsman Insurance Inquiry (ASBFEO)
In its submission, NIBA focused on the important services brokers provide to their small business clients. Highlighting that the role of the insurance broker is to act for and on behalf of the client, to help the client understand their risks and insurance needs, to prepare a recommended insurance program to cover those risks, and to access the insurance markets to get the best possible coverage for the client at the most cost effective price. Acting in this way, the insurance broker acts as a purchaser of insurance cover on behalf of their client, not a seller of insurance cover.
NIBA CEO Dallas Booth said, “There are number of indicators which suggest what when a client has an insurance broker acting on their behalf, their insurance recovery is much more successful, and a higher proportion of the loss is recovered from the relevant insurer.”
The submission also pointed to the low incidence of AFCA complaints and disputes by consumers and small businesses regarding insurance brokers, the sound operation of NIBA’s self-regulatory Insurance Brokers’ Code of Practice and lack of significant consumer complaints, as evidence that brokers are operating in the interests of their clients.
NIBA also noted that a robust protection regime applies for consumers in relation to the conduct of insurance brokers at general law, the Corporations Act (2001) Cth and other relevant legislation. There is no evidence that these mechanisms are not working.
The submission also clarified that insurance brokers also become the advocate of the client when an insured event occurs, and a claim has to be made under the policy.
NIBA has offered to meet with members of the inquiry to provide further insight into the intermediated insurance industry and ensure that the inquiry has a thorough understanding of the important role brokers play, especially in the small business space.