The independent reviewer of the broking code of practice has called for disclosure of fees and commissions to all individual and small business customers.

Phil Khoury, from law firm crkhoury, today published his final report, and the National Insurance Brokers Association board is preparing its response.

The report summarises submissions to a consultation paper released earlier this year and makes 14 recommendations, including on the “headline issue” of remuneration transparency.

As insuranceNEWS.com.au has reported, remuneration disclosure was a long-running flashpoint during the last code review. Some brokers agreed commissions should be disclosed to small businesses as well as retail clients, but others resisted that change and it was eventually removed from the 2022 code.

Mr Khoury recommends reinstating that extension to Section 6.1 of the code, arguing it “should oblige signatories to provide all individual and small business clients with remuneration disclosure regardless of the type of insurance product”.

He notes some brokers are opposed to this but the NIBA board is supportive of the position.  

“For brokers, small businesses are a core constituency,” the report says. “We think that they are deserving of the same transparency for business insurance as for non-business insurance.”

The report’s introduction says assumptions this code review would be carried out in a “benign environment” were misjudged.

“Insurance broking practices turned out to be quite a bit more controversial than might have been expected,” Mr Khoury says, noting the “media-driven furore” around strata.

This led to the review taking “longer to complete than planned”.

Other recommendations suggest that the code is redrafted “as promises to the client” and that it forms part of the contract with clients.

The report suggests an investigation of broker compliance with Section 6.1 and other requirements, and that fee and commission disclosure takes place at quotation and the time of invoice.

It recommends that clients are contacted 28 days before expiry on renewals, a new obligation to keep complete and accurate client records is introduced, and that the code is reviewed every five years, instead of every three.

The NIBA board will consider the report before releasing a response, and will engage with members and stakeholders on next steps.

Chair of the code review committee Di Phelan says the “breadth and depth of engagement” throughout the process “speaks to the profession’s genuine commitment to strengthening transparency and accountability”.

There is no indication of when the revised code will be launched.

See the full report here.