The Insurance Brokers Code Compliance Committee (IBCCC) has called for significant improvements in disclosure and communication practices among brokers, following concerning findings in its latest data report.
The IBCCC’s report highlights a significant increase in breaches related to remuneration disclosures, with 106 breaches reported in the latest period compared to just 23 in the previous one.
Oscar Shub, Chair of the IBCCC, stressed the importance of transparency regarding commissions and other benefits.
“It is crucial for brokers to provide clear information about any remuneration they receive. Clients have a right to know about commissions or other benefits brokers expect from providing certain services,” Mr Shub said. “The sharp rise in breaches in this area is a clear signal that brokers need to do better.”
The report also revealed a significant rise in failures to meet policy renewal timeframes and communication standards. In 2023, breaches related to timely policy renewals increased by 48%, jumping from 1,397 in 2022 to 2,073 in 2023.
“The Code requires brokers to contact clients at least fourteen days before their insurance cover expires,” Mr Shub explained. “Timely renewal communication is vital to ensure continuous coverage and prevent potential financial risks. Unfortunately, too many brokers are falling short in this area.”
Mr Shub emphasised the importance of clear and concise communication to maintain trust and provide clients with the best possible service.
“Communicating with clients in a timely manner using clear language is fundamental to good client relationships and effective risk management,” he said.
The IBCCC also noted ongoing issues with the quality of breach identification and reporting among brokers. Despite the IBCCC’s efforts to encourage improvements, many brokers continue to submit incomplete, inaccurate, or inconsistent compliance data.
“Good quality data is essential for identifying and addressing underlying issues,” Mr Shub said. “It is beneficial for both clients and brokers. Poor data collection is a missed opportunity and can lead to poor outcomes for clients, as well as increased costs due to dispute resolution.”
The IBCCC urges brokers to take these findings seriously and to implement the necessary improvements to ensure compliance with the Code.
“The data in our report should serve as a wake-up call,” Mr Shub said. “Brokers need to prioritise effective compliance and reporting practices to enhance their service standards and maintain trust with their clients.”
The IBCCC’s latest data report offers a comprehensive overview of the industry’s performance, highlighting both successes and areas needing improvement over the past year.
About us:
The Insurance Brokers Code Compliance Committee is an independent body that monitors compliance with the Insurance Brokers Code of Practice. Our purpose is to ensure consistent and high-quality service standards are maintained for the benefit of consumers, increasing trust and confidence in the insurance broking industry.
Contact details:
media@codecompliance.org.au
