The next version of the broking code must extend remuneration disclosure obligations to small businesses, its compliance committee says.

In its submission to the ongoing independent review of the National Insurance Brokers Association code, the committee says it is “essential” that commitments and protections go beyond retail clients.

As insuranceNEWS.com.au has reported, an earlier version of the current code required brokers to tell all individual and small business clients – regardless of whether they are retail or wholesale customers – how they are paid for their services.

But concerns from some broking members over the inclusion of small businesses led NIBA to drop the requirement in the 2022 document.

The Insurance Brokers Code Compliance Committee was disappointed by this move at the time, and in the submission describes it as a “significant retrograde step” that was carried out without proper consultation. 

It says section 6.1 of the code should be expanded so that brokers are required to “disclose remuneration and commissions to all individual and small business clients, irrespective of their insurance needs”.

It adds that the code should align with the Australian Financial Complaints Authority definition of a small business, which is an organisation with fewer than 100 staff. 

“Some brokers already disclose remuneration and commissions voluntarily, demonstrating that transparency is both feasible and beneficial,” the submission says.

“The review of the code is a valuable opportunity to restore and strengthen these protections, ensuring all individual and small business clients receive the clarity and disclosure they need to make informed decisions.”

The submission also addresses renewal time frames, and urges more specific targets around claims handling updates.

It also recommends “named reporting” around breaches and complaints for greater transparency.

insuranceNEWS.com.au will report on the submission in more detail on Monday.

It can be read in full here.