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NIBA backs diploma requirement in ASIC submission

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The National Insurance Brokers Association (NIBA) has proposed to the Australian Securities and Investments Commission (ASIC) that industry qualification standards should be changed to include a diploma requirement.

NIBA recommends the insurance broking diploma standard should apply whether advice is personal or general, and without distinguishing between retail or wholesale clients, with the exception of domestic insurance policies.

In the case of domestic policies provided to retail clients the qualification level should be lifted to a Certificate IV, it says in a submission.

President Eric Harris told the annual convention yesterday that NIBA had discussed the issue at length and consulted widely with members before proposing the changes.

“NIBA has long held the view that a professional insurance broker should hold appropriate qualifications for the work they do on behalf of the clients, and the NIBA board was very pleased to sign off on the ASIC submission to raise standards in this area,” he said.

Regulatory Guide 146 currently applies only to people providing general or personal advice to retail clients, and the highest standard required is a partial completion of a Diploma in Insurance Broking, known as a Tier 1 accreditation.

Legislation to raise the professional, educational and ethical standards of financial planners was passed in February 2017, but exempted general insurance brokers.

ASIC has recently advised it would welcome a proactive submission from NIBA in relation to determining appropriate education standards for brokers.

NIBA says the accredited industry package delivered by Registered Training Organisations remains relevant and appropriate and students normally undertake studies while working in a broking office.

“This educational framework was the reason NIBA saw no reason to mandate a bachelor’s degree as a minimum education requirement for insurance broking as has been the case with financial advisers,” the submission says.

“NIBA strongly believes a person coming into insurance broking with a degree in business, commerce, finance or a related field, would still need to undertake an appropriate level of further training to learn the knowledge, skills and competences needed to be a competent insurance broker.”

Other recommendations in the submission include that the minimum standard for broking representatives providing factual information only should be raised to a Certificate III, except for people such as referrers, clerks and cashiers, while a call centre representative exemption should be removed.

NIBA suggests a transition period of two years from the date ASIC amends RG 146 or its equivalent to enable existing brokers to become fully compliant.