Brought to you by:

Brokers urged to take self-reporting of code breaches seriously

Facebook Twitter LinkedIn Google

The Insurance Brokers Code Compliance Committee (IBCCC) has pressed the importance of self-reported breaches, as they may highlight lapses in a subscriber’s compliance monitoring process.

“Self-reporting enables subscribers to demonstrate a clear understanding of their own compliance performance and their willingness to improve, where necessary,” Chairman Michael Gill said in the IBCCC’s Annual Data Report.

“An insurance broking business with a healthy self-reporting culture is one that seeks to provide the best possible outcome for its clients; where the norms and values of the business are aligned with the Service Standards set out in the Insurance Brokers Code of Practice.

“All staff are encouraged to view breach and complaint reporting as an opportunity to learn and improve; and where robust compliance frameworks and processes support each of these things to occur.”

The Annual Data Report released last week says the number of code subscribers self-reporting breaches fell to 44% last year from 51% in the prior period. Some 56% of subscribers failed to report any breaches.

“This is concerning because it potentially signifies that large numbers of subscribers have compliance frameworks that fail to detect breaches or complaints, or a weak or non-existent self-reporting culture,” the IBCCC said.

The Annual Data Report follows the release in August of the IBCCC’s annual 2020/21 annual report and contains a detailed analysis of breach data by code service standard.

Non-compliance in relation to service standards and legal obligations as set out in the Insurance Brokers Code of Practice dominated subscriber breaches last year, the report says.

Service Standard 5 of the code – which states a subscriber will act diligently, competently, fairly and with honesty and integrity – made up 49% of all breaches.

Service Standard 1, which covers compliance with legal obligations, accounted for 22% of breach numbers.

After Standard 5 and 1, Standard 7 – which relates to money handling – was the third most breached area at 11%. Next was Standard 12, which is designed to ensure that subscribers do not bring the insurance broking profession into disrepute.

Click here to access the report.