The National Insurance Brokers Association (NIBA) has restricted new rules on remuneration disclosure to retail clients, after consulting with members and taking into account the Quality of Advice Review final report.

The 2022 Insurance Brokers Code of Practice was altered in April last year to expand the remuneration disclosure requirement to include all individual and small business clients, not just those that fall under the definition of retail clients.

Section 6.1 of the code then said “if the client is an individual or a small business and we are acting on their behalf, we will provide them with information about any remuneration (including commissions) or other benefits we will or expect to receive as a result of providing Covered Services”.

However, some NIBA members were unhappy with the change because of the added complexity and impact it could have on systems and processes, and implementation of 6.1 was delayed until November this year.

NIBA today confirmed that the wording will go back to focusing on retail clients, to align with the Quality of Advice Review report.

A note to members said 6.1 will now read: “If the client is a retail client, we will provide them with information about any remuneration (including commissions) or other benefits we will or expect to receive as a result of providing Covered Services.”

Retail clients can be small businesses that are purchasing defined retail products.

“This differs from the current obligation which requires brokers to disclose commissions to all individual and small business clients regardless of whether the client is a retail or wholesale client,” NIBA’s note says.

“This change aligns the code with the commission disclosure requirements recommended by the Quality of Advice Review, which have since been accepted by the government.

“This will provide consistency with the government’s proposal and avoid additional administrative complexity for brokers and confusion for their clients.”

NIBA CEO Phil Kewin told insuranceNEWS.com.au that during consultation with members the “overwhelming response” was that the reference to small businesses had “made things more complicated for limited value”.

“It is quite clear in the Quality of Advice Review report that the main concern is retail clients and making sure they are protected,” Mr Kewin said.

A new version of the code will be sent out shortly to reflect the change.