The National Insurance Brokers Association says it will continue to engage with members and the code compliance committee to ensure standards in strata are met, after a report identified failings.

NIBA has acknowledged that governance of representative arrangements must be tighter and conflicts need to be managed, not just disclosed.

“Owners’ corporations are making some of the largest financial decisions a community makes. They’re entitled to confidence that the broker acting on their behalf is transparent and is managing any conflicts in the client’s interests,” CEO Richard Klipin said.

“Where the report shows that hasn’t happened, we take it seriously.”

This week, the Insurance Brokers Code Compliance Committee said it had issued nine breach determinations and referred two brokers to the Australian Securities and Investments Commission following a review of arrangements.

The review – which examined seven brokers with 1088 strata representatives – found weaknesses in agreements, remuneration disclosure, conflict of interest management, and oversight of conduct and compliance.

Three of the brokers examined were large, with more than 100 full-time equivalent staff, three were medium-sized and one was small, with up to 20 staff.

NIBA welcomes the finding that brokers moved quickly once gaps were identified, updating agreements and strengthening oversight.

“This is the code framework doing what it’s designed to do: an independent committee reviews how brokers are operating, identifies where the standard isn’t being met, and brokers respond by strengthening oversight once the issues are raised,” the association said.

Consumer and apartment owner groups say the review should not end with the seven brokers and have called on the compliance committee to expand its work across a broader cross-section, particularly including smaller brokerages where governance frameworks may be less mature.

They are also concerned the investigation may have identified practices outside the code’s scope but below community expectations.

Australian Consumer Insurance Lobby chair Tyrone Shandiman says the code committee deserves credit, but the report should be a wake-up call.

“The [committee] has identified exactly the types of failures we warned about, demonstrating why NIBA’s decision not to strengthen the code is such a missed opportunity,” he said.

Unit Owners Association of Queensland representative Mike Murray says it is time for meaningful reform rather than more delay.

“What concerns did the [committee] identify that fall outside the current code but still fail the pub test? That’s what worries us most,” he said.