The National Insurance Brokers Association has faced further criticism for retreating from a previously accepted recommendation to enhance remuneration disclosure for small businesses in its updated code of practice.

As reported in The Broker newsletter earlier today, independent reviewer Phil Khoury expressed disappointment that his recommendation was not included in a draft code published yesterday.

Now, the Insurance Brokers Code Compliance Committee has echoed those sentiments, arguing limited disclosure to small businesses has “long been a significant weakness” in the code.

Currently, remuneration must be disclosed to retail clients as defined in the Corporations Act – meaning individuals or small businesses that purchase from a set list of mostly personal lines products.

But Mr Khoury, in his final report at the end of last year, recommended that the new code require disclosure to all small businesses regardless of product.

In January, NIBA accepted the recommendation, but it has now reversed its position on this point following further consultation and research.

However, the new code does extend disclosure requirements for strata customers, and says if any business asks for details they must be given a dollar figure.

“The Insurance Brokers Code Compliance Committee is disappointed that the draft code does not fully adopt the independent reviewer’s recommendation to require remuneration disclosure for all individual and small business clients, regardless of the type of insurance product,” a spokesperson said today. “This is particularly disappointing given NIBA had previously accepted that recommendation.

“This has long been a significant weakness in the code. The need for protection does not change according to the nature of the product ... The committee considers that individual and small business clients should receive clear remuneration disclosure as a matter of course.”

NIBA is consulting on the draft code, which includes a raft of other updates, until August 7. It is aiming for a January 1 launch.

The full document can be read here.