Broking code definitions of complaint and breach are “notably vague”, leading to significant under-reporting, a submission to the code review says. 

“The code must convey definitive descriptions of what constitutes a complaint or a breach,” brokerage Clear Insurance says. “Such clarity eliminates varied interpretations and ensures all parties – client, insurer or broker – clearly understands their reporting duties.”  

Clear says confusion can arise when considering if an incident is a breach or a reportable complaint, and which party reports.

“Such hesitation results in inefficiencies, wasting valuable time and resources. 

“For instance, if a client makes an offhand remark about an insurer, some may categorise it as a complaint, while others may not.” 

The submission says arrangements for managing conflicts of interest require improvement. It proposes a standardised declaration procedure – including for remuneration from referrals, ownership or shares – to maintain impartiality and prioritise client interests.

Remuneration disclosure should be required for all clients and covered services, not just retail clients, to ensure transparency and prevent opportunistic behaviour, Clear says.

“The code should prioritise the duty of care over whether to disclose remuneration. Not disclosing remuneration implies a level of embarrassment about the integrity of the process and the best interests commissions serve. It’s self-serving not to declare remuneration.”

Clear argues the insurance industry should operate on a fee-for-service model to ensure high-quality advice, and says concerns around removing commissions are “money-oriented, not client-centric”.

It also suggests changing terms used in the code so “broker” becomes “risk and insurance adviser”.

Public submissions to the independent review, led by Phil Khoury, are available here.