The Royal Commission’s Interim Report provides an early indication of the Commissioner’s concerns that have arisen out of the first four rounds of Royal Commission hearings.
These hearings dealt with banking, intermediaries between borrowers and lenders, and the provision of financial advice to retail customers. The performance of key regulators was also examined. Insurance was not covered in those hearings or in the Interim Report. NIBA is examining the Interim Report to identify any comments that might relate to the work of insurance brokers and the services they provide to their clients.
The Royal Commission looked closely at life insurance and general insurance in the Round 6 hearings recently. Following those hearings, the Commission issued a list of issues and concerns that arose during those hearings. Those issues include the extent to which remuneration and commissions are or should be regulated. NIBA is looking at these issues very closely, and will most likely provide a submission to the Commission to explain the role, value and benefits that insurance brokers provide to their clients, insurers who operate in the intermediated space, and to the community more broadly.
Royal commissioner Kenneth Hayne has outlined a series of simple principles that he said pointed to a need to simplify the existing law rather than add some new layer of regulation.
● Obey the law
● Do not mislead or deceive
● Be Fair
● Provide services that are fit for purpose
● Deliver services with reasonable care and skill
● When acting for another, act in the best interests of that other
The good news is that the Royal Commission has not raised any issues or concerns in relation to general insurance brokers to date, and statistics from the Financial Ombudsman Service and the Insurance Brokers Code Compliance Committee are very positive indeed.