Consumer advocates have called on the National Insurance Brokers Association to aim higher in its response to code of practice review recommendations.

The Australian Consumers Insurance Lobby says the independent review shows the sector is divided between those calling for reform and others “clinging to the status quo”.

Chair Tyrone Shandiman says NIBA’s position on addressing conflicts of interest fails to go beyond the Corporations Act and regulatory guidance.  

“NIBA’s role as the steward of a self-regulatory code is to operate ahead of the law, setting higher standards and intervening where practices undermine consumer confidence or professional integrity,” he said.

“By choosing not to do so, NIBA is not avoiding regulation – it is simply leaving regulators to do the work the industry has declined to undertake itself.”

The review recommends – consistent with NIBA’s proposal – that the new version of the code should bring together various provisions on managing conflicts into one standalone provision, with a glossary referencing regulatory guidance.

But the reviewer’s report notes a lack of consistency in practices “and a lack of confidence in those practices”, and proposes NIBA request an Insurance Brokers Code Compliance Committee investigation.

Strata residents group the Owners Corporation Network says NIBA’s response to the recommendations is disappointing.

“Instead of using the review to create an ambitious and enforceable code, it seems like NIBA is accepting the easy recommendations and coming up with ‘concerns’ to some others that obfuscate and sidestep the real issues,” MD of operations David Glover said.

Mr Glover notes NIBA rejects contractual enforceability and opposes including a statement similar to section 9 of the financial planners’ code of ethics, while it has responded to criticism by supporting remuneration disclosure for individuals and small businesses. 

“The writing is on the wall in big red spray paint,” Mr Glover told insuranceNEWS.com.au. “We want to deal with good, honest, competent, reputable professionals who are happy to compete in an open, transparent way with their peers.”

The code compliance committee says issues raised in the review include some where NIBA supports strengthening and some over which it has concerns.

“The committee will need to consider these concerns and their impact across all areas of the current code,” chair Oscar Shub told insuranceNEWS.com.au.

“We intend to provide a considered response in due course as we continue to work through the detail.”