The independent Insurance Brokers Code Compliance Committee has described as “disappointing” its findings into the internal complaint handling process of subscribing members.

Only 63% of disputes last year were resolved within 21 days and another 12% took more than 45 days to settle, according to the findings released on Friday.

The code requires subscribing brokers to immediately acknowledge receipt of disputes and to work out a solution within 21 days. They have another 21 days to resolve it if clients are not satisfied with the initial offer made.

More than a quarter failed to record the 1049 complaints received last year – a statistic the committee has described as “most disappointing”. While large brokerages record detailed data for 63% of all disputes, the best of any group, the committee says this still falls short of what it expects from good industry practice.

“Clearly, there is room for improvement in the way that code subscribers manage timeframes for handling complaints,” the committee says in the report.

“An improvement in the timely resolution of disputes will benefit subscribers and their clients and aid the achievement of the code’s objectives.”

The committee’s “own motion inquiry report” builds on last year’s review on whether brokers are addressing disputes with clients effectively.

It cautions brokers against complacency, even if the Hayne royal commission found no severe misconduct issues affecting brokers.

“The hearings [of the royal commission] added intensity to what was already serious scrutiny of the financial services sector,” the report says.

“All financial services organisations are on notice of significant community dissatisfaction. All have much to learn and change urgently.”

The National Insurance Brokers Association (NIBA), which operates the code, has welcomed the report’s findings and suggestions for improvements.

“Clearly these matters need to be addressed and resolved as quickly as possible,” CEO Dallas Booth told insuranceNEWS.com.au.

“NIBA is committed to high standards of professionalism.”