‘Mistakes have been made’, but code delivers unprecedented improvement: NIBA
National Insurance Brokers Association (NIBA) CEO Phil Kewin accepts that designing and implementing the 2022 brokers code of practice “hasn’t been plain sailing”, and that “mistakes have been made” along the way.
But writing in the latest NIBA magazine, Mr Kewin says that commission disclosure requirements, which were implemented on November 1, are just one aspect of a code that “delivers unprecedented levels of professional commitment, ethical behaviour, transparency and accountability”.
As insuranceNEWS.com.au has reported, a requirement to disclose commissions to small business clients was inserted into the code and then removed, after some brokers said it would be too difficult to implement. The latest change has been criticised by advocates for transparency, but backed by major broking groups.
Mr Kewin has previously said that when the small business aspect was added to the code, the NIBA membership was not consulted as broadly as it should have been.
This issue was addressed by AUB MD and CEO Mike Emmett in an interview with insuranceNEWS.com.au.
“The final draft of the code that we were given to review and approve did not have that [small business wording] in it,” Mr Emmett said.
“Then it was published and circulated as a final version with new wording in it. It was an unusual late revision. I said, ‘what’s the point of asking us to approve something if you are just going to change it willy-nilly afterwards?’
“Version 1 we were happy with, and actually several thousand copies of the code were printed with version 1.
“Then we had version 2 which was radically and suddenly, and dare I say secretly, changed and released, and now we are at version 3 which is back to version 1.”
Mr Emmett also said the Insurance Brokers Code Compliance Committee, which has criticised the latest wording change, should stick to its compliance role. He also says that questioning aspects of the code could encourage others to not comply.
“The code compliance committee [should do] what their remit is, which is to ensure compliance with the code rather than commenting on the code,” he said.
Chairman of the committee Oscar Shub has responded to the comment.
“Transparency is in the best interests of consumers, and we reiterate our view that code obligations for disclosing commissions and remuneration should be strengthened,” he said.
“The brokers that value transparency support this position willingly.”
In an article later in the NIBA magazine, Lex McKeown Trophy winner and Edgewise Chairman Gary Seymour describes the latest code as a “lost opportunity”.
“If we want to truly be a profession, surely the minimum standard is that we disclose our earnings,” he says.
“I know we're moving in the right direction, but can you imagine lawyers, accountants, architects, doctors not disclosing what they’re charging and being paid?
“We need to believe in the value that we bring and be comfortable to charge. Charge with pride.”
Mr Kewin says “things never stand still”, with the next three-year review due in 2025, but adds “right now it’s about supporting brokers in delivering the right outcomes for clients”.