The results of the Australian Securities and Investments Commission’s (ASIC) inquiry into broker remuneration has found exactly what the industry has been saying for months – that Australia has one of the most stringently regulated insurance industries in the world, and brokers don’t use the kind of business practices being investigated in the US.

The National Insurance Brokers Association (NIBA) has welcomed the results of the inquiry, which were released yesterday, three months after the results were originally scheduled to be released. CEO Noel Pettersen says the final ASIC report  “reinforces the important and irreplaceable role brokers have in placing insurance for consumers”.

While there were a few cases where isolated deficiencies were identified, they “were not judged serious enough to warrant enforcement action by ASIC”.

“This report reinforces what we have been saying since last November, when the Spitzer inquiries in the US first began – that Australian brokers are very tightly regulated and professional in their dealings with clients and insurers.”

The report found no evidence of “bid-rigging” and “steering” practices among the 15 small, medium and large brokers it examined.

Despite the generally positive tone of the inquiry report, NIBA has taken exception to the negative tone of its media release announcing the results. Mr Pettersen says the release  “does not reflect the overall thrust of the report”.

For example, while the ASIC media release reported an increase in the use of contingent commissions, it failed to add that the report found such commissions “immaterial” in their impact on brokers’ bottom lines.

Despite the difference of opinion, NIBA has vowed to work with ASIC on the issues raised in the report.

Mr Pettersen says the proposed changes to the FSRA, which will reduce the amount of documentation clients receive, and other projects including the updated Insurance Broker Code of Practice, will “ensure that insurance buyers in Australia remain the best protected in the world”.

More on this issue in Tuesday’s news.