General insurance intermediaries have continued to attack new commission consent requirements, following an article published in our broker newsletter last week.

The law – which spun out of the Quality of Advice Review – takes effect on July 10 and says general insurance brokers that are providing, or likely to provide, personal advice to retail clients must obtain permission to be paid a commission. 

Clients’ written consent or a written record of any verbal consent are accepted as proof of permission.

Some brokers have raised concerns that the rule is needless, as income to retail clients is already disclosed, and that it could add cost to an already stretched process, making retail business unsustainable.
 
“There’s a level of absurdity to these new laws,” Broking Operations Manager at WA’s South Coast Insurance Brokers Anastasia Hawkins says.

“We now have brokers receiving the same commission but a broker giving general advice doesn’t have to obtain informed consent, while the broker giving personal advice does."
 
She says her team is “burnt out” from an ever-increasing regulatory burden.

“These laws seem ill-considered for the large volume of transactions for a general insurance business. What does this achieve that the dollar disclosure of commission which we are already giving to clients does not?”

Another broker contacted insuranceNEWS.com.au to argue that brokers are being “thrown under the bus” for “wanting to make a living”.

“Every broker is looking at the entire client, not just one part of their activity or requirement and we need to be knowledgeable on so many different classes of insurance and not to mention every industry out there.

“ASIC should concentrate on the mess direct insurers cause and leave qualified general insurance brokers alone. We should ban direct insurance and make it mandatory to go via a broker.”

More detail on the new requirements is available here.