Home / Local / Significant code breaches by brokers double
10 October 2016
The number of significant breaches of the Insurance Brokers Code of Practice more than doubled last financial year, an annual review has found.
There were 11 significant cases, compared with five in both 2013/14 and 2014/15.
Code Compliance Committee Chairman Michael Gill says the rise demonstrates “a robust reporting culture” among brokers.
“Significant breach reporting means problems are being identified and remediated, which provides restitution for affected customers, improves future services and benefits the insurance broking industry,” he said.
Ordinary breaches remained stable, with 32% of the 323 brokers that subscribe to the code reporting one or more, compared with 33% the previous year. There were 862 code breaches in total.
Non-compliance with legal obligations was the biggest cause, accounting for 29% of self-reported breaches.
About 52% of brokers reported one or more customer complaints, down from 60% the previous year.
There were 1023 complaints in total, with 79% resolved within 21 days.
National Insurance Brokers Association CEO Dallas Booth told insuranceNEWS.com.au he is not concerned by the rise in significant breaches.
“Brokers are still getting used to the code expectations,” he said. “It is a maturing of the process – there is no drop in standards among brokers.
“[Compliance with legal obligations] is an ongoing challenge. We try to make sure brokers are aware of legal developments.”
The Code Compliance Committee is supported by, but independent from, the Financial Ombudsman Service.