The new Insurance Brokers Code of Practice, launched today, includes an obligation for brokers to report other brokers over breaches, and the possibility of naming and shaming those that have breached the code.

The National Insurance Brokers Association (NIBA) says the new document also includes a ban on preferential remuneration, increased disclosure requirements and an obligation to identify and support vulnerable clients.

Brokers have until November 1 to prepare for the new requirements, and NIBA will provide advice and guidance in the meantime.

“The new code ... is the product of an extensive review and consultation process, undertaken by an independent reviewer,” NIBA President Dianne Phelan said.

“On behalf of the NIBA Board, I am proud to deliver this new code to our members today. The NIBA Board and I decided a new Insurance Brokers Code of Practice should be built from the ground up, one which exceeds the law and holds members to a higher standard.

“I am very pleased to say that we have achieved this. But ultimately, this is not our code, it is the brokers’ code.”

The new code is well overdue. The previous version dates back to 2014, and reviews are intended to be carried out every three years.

Consumer groups were unhappy with the first draft, saying it fell short of expectations and was difficult to understand.

But Director of Casework at Financial Rights Legal Centre, Alexandra Kelly, told insuranceNEWS.com.au today the final document is “a big step forward”.

“We welcome a strengthened NIBA code and appreciate the work that NIBA have put in to build in improved protections for consumers who use insurance brokers,” she said.

“Having said that there always remains work to be done. We don’t think the conflicts of interest and commission remuneration sections are as strong we would like them to be – especially in comparison to the FASEA Code of Ethics.

“The upcoming Government review into remuneration will be challenging for the insurance broking industry. Nevertheless the new code launched today is a big step forward.”

Chairman of the Insurance Brokers Code Compliance Committee Oscar Shub says the committee’s early concerns were taken on board and paid tribute to the level of cooperation between all parties.

Sanctions available to the committee do not include a financial penalty, but it can “publish the fact that a named code subscriber has breached the code and details of the breach”. Mr Shub says that’s appropriate.

“If you want to protect the public then it is important that if you have errant brokers that they are identified, but we will exercise some discretion,” he told insuranceNEWS.com.au.

Mr Shub welcomes the fact that brokers are obliged to report others, but says self-reporting is key.

“The stress in the new code is about changing culture – not ticking boxes but changing the way people are operating.”

Click here to see the new code.