Our mission to promote good practice continues in these uncertain times, with a special focus in the year ahead on understanding behaviour and changing it for the better.
QUOTE: ‘The Royal Commission found that the issue was often the underlying behaviour in financial service entities rather than existing laws and regulations’
The Insurance Brokers Code Compliance Committee (the Committee) recognises that insurance brokers and their clients face unprecedented challenges due to the COVID-19 pandemic – especially given many Code-subscribing brokers are small business operations.
The obligations built into the Insurance Brokers Code of Practice are particularly relevant in challenging times, not least Service Standard 9 to respond to catastrophes and disasters in a timely, professional, practical and compassionate manner in conjunction with any industry-wide response.
The Committee acknowledges that meeting the needs of clients while managing altered staffing arrangements may make it difficult to meet Committee requests. We are here to help, so please work with us if you encounter problems.
The Committee’s work in monitoring compliance with the Code and guiding subscribers towards good practice will continue. However, the Committee’s 2020-21 activities will be more focused on moving beyond technical compliance and instead towards good behaviour. This is in line with our vision and addresses concerns raised in the Financial Services Royal Commission, which found that issues were often caused by the underlying behaviour of institutions rather than by existing laws and regulations.
The data supplied by Code subscribers for the Annual Compliance Statement (ACS) is a critical part of this strategy, allowing us to establish and benchmark current behaviors. The benchmarked information will be an invaluable self-improvement tool for subscribers.
To complement this data, the Committee will engage directly with industry participants and leaders in the coming year to identify problematic behaviour and assemble case studies demonstrating both good and bad practice. This intelligence-gathering will involve the Australian Small Business and Family Enterprise Ombudsman, its equivalent state and territory bodies and the many advisory and industry bodies associated with these groups.
The Committee’s Code breach monitoring and reporting duties will continue as normal, with it providing feedback to industry and consumer advocates about outcomes and insights. Particular aims for 2020-21 include improving the collection and analysis of self-reported breach and complaints data; enhancing transparency; and, strengthening the ability to collect information from multiple sources.
Identifying problematic areas is an essential ingredient of change, but full insight into the way our industry conducts itself also requires the recognition and promotion of appropriate behaviours. The Financial Services Royal Commission has provided an opportunity to shift the way Australia thinks about the conduct of financial service providers. We can no longer afford to simply look at legal compliance alone. The Committee plans to use this opportunity to examine and engage with insurance broker behavior and guide the industry wherever possible. The Committee will continue to provide written guidance about good practice by sharing case studies and examples drawn from its intelligence-gathering process, while encouraging stakeholders to actively share information about industry practice too. The Committee also aims to promote understanding of its work and the Code’s benefits among subscribers, the wider community, regulators and the board of the National Insurance Broker’s Association.
Ultimately, all of the activities aimed at gaining insight into industry behaviour will contribute to a formal Committee project examining the underlying themes and drivers of poor behaviour and developing techniques we can all use to create good behaviours.
This focus on bringing about real change in industry behaviour is an exciting direction and, we hope, will prove valuable for industry and consumers alike.
May 2020