In its 2022 Annual Data Report, the Insurance Brokers Code Compliance Committee (IBCCC) welcomed an increase in the number of brokers that reported breaches and complaints but had concerns that too many continue to report zero breaches or complaints.
The report, based on data sourced from Code subscribers' Annual Compliance Statements (ACS) reveals that a notable 175 brokers reported no breaches, and 152 reported no complaints in the reporting period.
Chair of the IBCCC, Oscar Shub, expressed concern over these findings.
“The numbers are worrying and prompt important questions about the thoroughness of self-assessment. Are all issues being accurately reported? Transparency is paramount in maintaining trust within our industry.”
While more subscribers reported breaches in the 2022 ACS, the IBCCC believes there is still room for improvement around the diversity and effectiveness of the compliance frameworks in place across the industry.
Accurately identifying, reporting, and recording breaches are crucial aspects of the self-regulatory model.
The IBCCC also wants insurance brokers to look more closely at the root causes of breaches.
“We urge our subscribers to shift their focus from simply identifying the 'who' and 'what' of breaches to understanding 'why' they occur. This shift in perspective can lead to more effective preventive measures and ultimately better consumer outcomes,” said Mr. Shub.
The most frequently reported breaches in 2022 related to purchasing insurance, managing claims, and adherence to legal requirements, comprising just over 78% of all reported breaches.
Mr. Shub noted that the continued frequency of these issues indicates that more needs to be done.
“Only with vigilance and continual improvement of processes and systems will we start to see positive changes in these reporting areas,” Mr. Shub said.
With the 2022 Code now in effect, the IBCCC expects breaches for the 2023 reporting period to rise.
“Regulatory changes often require a period of adjustment as industry adapts and integrates new compliance measures. An increase in reported breaches will demonstrate that insurance brokers are aligning their businesses with the updated standards,” Mr. Shub said.
The IBCCCs is committed to working with insurance brokers over the coming year to improve industry compliance, with the ultimate goal of creating better outcomes for consumers.
The purpose of the IBCCC is to monitor compliance with the Insurance Brokers Code of Practice to improve service standards of the insurance broking industry. It monitors, enforces and reports on Code compliance, while working to improve standards and promote good practices.