About the Code
The Insurance Brokers Code of Practice
The 2014 Insurance Brokers Code of Practice (the Code) sets standards of good industry practice for insurance brokers when dealing with current and prospective individual and small business clients.
The Code is owned and published by the National Insurance Brokers Association (NIBA) and forms an important part of the broader national consumer protection framework and financial services regulatory system.
It includes a set of service standards that guide insurance brokers who subscribe to the Code how to act when providing insurance broking services to consumers. These service standards form the basis for the Code’s specific obligations.
The objective of the Code is to build professional competence in the insurance broking profession; and increase consumer trust and confidence in insurance brokers.
The Committee is an independent Committee that monitors adherence to the Code while also providing education and support to subscribers. The Committee works proactively with subscribers to guide compliance improvements. The Committee has the authority to sanction insurance brokers if they do not take corrective action after breaches.
A review of the Code is currently in progress under the direction of NIBA. The Committee engaged with NIBA and an independent reviewer as part of their initial review process in September 2018 and provided our feedback on issues faced within the industry.
In May 2019, the Committee also provided a submission to Treasury in relation to its consultation paper on the enforceability of financial services codes. Treasury published the paper in response to recommendation 1.15 in the final report of the Royal Commission. The Royal Commission recommended that ASIC be given increased oversight of industry codes, and that breaches of some code provisions be made illegal as a way of preventing systemic failures in applying the code.
Our submission outlined our view that allowing sanctions to be imposed and enforced by regulators has the potential to drastically alter the nature and function of the industry’s Code of Practice to the detriment of both consumers and brokers. The Committee urged Treasury to recognise the role and value of the Code and to be circumspect in their approach to any changes to the Codes framework.