Report emphasises focus on corporate culture

The independent committee that monitors the Insurance Brokers Code of Practice (the Code) has released its Annual Report for 2020–21, a year marked by the continued impact and disruptions of COVID-19, the torrent of legislation following the Financial Services Royal Commission and the unprecedented risk challenges facing the insurance industry.

The report can be accessed here.

The report outlines the activities of the Insurance Brokers Code Compliance Committee (the Committee). Work included:

  • ongoing involvement in the current review of the Code
  • inquiries and investigations
  • publishing examples of good practice and guidance on improving compliance with the Code, both its objectives and its standards
  • regular compliance monitoring and analysis; and
  • engagement with the Code’s many stakeholders, including Steadfast brokers who adopted the Code in December 2019, swelling the ranks of subscribers by 56 per cent.

Underpinning the year’s activities was the Committee’s commitment to encouraging cultural and behavioural change in the industry for the benefit of insurance brokers, consumers and the wider community.

In his message, the Committee Chair, Michael Gill noted that:

 “While the law undoubtedly has a role, the Committee recognises that good and bad practices will always stem directly from a company’s culture and the behaviour it fosters … This year’s work has continued to focus on building our understanding of the issues through monitoring subscriber behaviour and identifying shifts that can help subscribers deliver better customer outcomes, particularly in relation to vulnerable clients or financial hardship.”

In 2020–21 the Committee engaged a behavioural scientist Ravi Dutta-Powell whose review of Code breach data identified behaviours causing both good and poor practices. His work contributed significantly to the Committee’s submissions to the Code review in May and will help refine the Committee’s focus in the year ahead.

The Committee maintained a robust monitoring of compliance with the Code, which included collecting breach and complaints data in the Annual Compliance Statement (ACS). This year marks a change in reporting findings from this data. An initial summary appears in the Annual Report, but from now on the Committee will present its more detailed analysis in a standalone report later in the year.

Other compliance and monitoring activities included:

  • providing a webinar to support ACS completion
  • conducting video conferences with 10 per cent of all subscribers to discuss their data, and
  • providing individualised benchmark reports to all subscribers.

The Code team met regularly with the Australian Securities and Investments Commission (ASIC) and with representatives of the Australian Financial Complaints Authority (AFCA). Own motion inquiries examined Add-On Insurance Products and Premium Funding Arrangements.

In the months ahead, the Committee will finalise its comprehensive analysis of the ACS data and looks forward to sharing its insights. Its focus on promoting positive shifts in culture will continue, while finalising the Code review will remain a priority.