The National Insurance Brokers Association says phase two of its code of practice review is under way, as a consultation paper highlights key issues including much-debated remuneration disclosure requirements.

Phil Khoury from CRK Consulting is leading the independent review of the 2022 code, and feedback on today’s paper is due by April 11. The reviewer will then hold small roundtable discussions before aiming to “draft our report during June”. Further consultation will be followed by a final report, but no timescale has been provided.

“High-level matters” flagged in the paper include conflicts of interest, aligning the NIBA code with others, ensuring it keeps pace with regulatory changes, and whether enforcement is sufficiently resourced.

The paper poses a series of questions and encourages stakeholders to also raise “other matters”.

As insuranceNEWS.com.au has reported, an earlier version of the current code required brokers to tell all individual and small business clients – regardless of whether they are retail or wholesale customers – how they are paid for their services.

But concerns from some broking members over the inclusion of small businesses led NIBA to drop the requirement in the 2022 document.

The reviewer raises the issue in today’s document, saying there is acceptance that small business clients are often “not sophisticated” and may need customer protections as much as individual consumers.

“The NIBA code recognises this, except in relation to disclosure of commissions,” the report says. “Different views about this were expressed in our initial discussions and we are aware that this has been a controversial issue within the signatory community.  

“A number of those we spoke to (external and industry stakeholders) remained disappointed at the change of position taken in the last version of the code.”

The section ends with the question: “Should the obligation to disclose remuneration apply only to retail clients? Should it also apply to an expanded group of small business products? Or to all clients and all covered services?”

Other questions focus on whether the code should be reviewed every five years instead of every three, whether complaints are under-reported, and whether the code helps create “a level playing field” for large and small brokers.

The consultation document is available here.

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