Only two significant code breaches among insurance brokers

Insurance Brokers Code Compliance Committee (the Committee) has published its Annual Review for 2016-17 and found a growing culture of positive breach reporting among insurance brokers. The Committee has issued one determination on a Code beach and investigated four Code breaches, two of them significant..

Michael Gill, Chairperson, Insurance Brokers Code Compliance Committee said, “At its heart, the Insurance Brokers Code of Practice is a commitment by Code Subscribers to focus on proactively improving client service. This means continuously reviewing and improving processes. Code Subscribers should be treating their breach and complaints registers not as something to simply fill out and file away, but as a valuable source of insight, learning and service improvement. We look forward to working with all stakeholders to achieve this vision in 2017–18.”

This review assesses insurance brokers’ compliance with the 2014 Insurance Brokers Code of Practice and covers the work undertaken by the Insurance Brokers Code Compliance Committee during the period 1 July 2016 to 30 June 2017. Data has been collated from monitoring the activities of the 318 insurance brokers that subscribed to the Code in 2016–17, and consists of the outcomes of an Own Motion Inquiry, the 2016 Annual Compliance Statement and investigations into alleged Code breaches.

This review also reports on the Code Compliance Committee’s monitoring activities from 1 July 2016 to 30 June 2017, and shares its experience of good industry practice – as well as the initiatives of Code Subscribers – to improve standards of practice and service in the Australian insurance broking industry.

Key findings include:

  • Self-reported Code breaches doubled, indicative of a growing culture of positive breach reporting among insurance brokers.
  • But reporting is inconsistent: two-thirds of insurance brokers self-reported no breaches and nearly half reported no complaints.
  • Insurance brokers need to review their compliance processes and reporting to ensure that they are a true reflection of performance.33% of self-reported breaches were for non-compliance with legal obligations, 23% concerned obligations to act ‘diligently, competently, fairly and with honesty and integrity’ and 17% concerned obligations to act professionally.
  • 15% of self-report complaints were about service issues, including general feedback and improvement suggestions.