Brokers that are not reporting any code of practice breaches are set to face scrutiny from the compliance committee due to concerns that issues are flying under the radar.

The Insurance Brokers Code Compliance Committee (IBCCC) annual report shows 48% of subscribers reported breaches last year, up from 44% from the previous year but still at a level that suggest there’s more work to be done in identifying and reporting.

“We know that in any organisation things can go wrong, and with more than half of all code subscribers reporting zero breaches it is likely that there are breaches going undetected or unreported,” Code Compliance GM Prue Monument told insuranceNEWS.com.au.

Ms Monument says that the new broker Code of Practice that comes into place from next month is more prescriptive and breach reporting is expected to increase.

“When we see zero breaches, we will engage directly with the subscriber to understand their systems and processes and, if necessary, recommend improved practices,” she said.

Ms Monument oversees a code team that is a separately operated and funded business unit of the Australian Financial Complaints Authority.

It administers the General Insurance Code of Practice, the Insurance Brokers Code of Practice, the Life Insurance Code of Practice, the Banking Code of Practice and the Customer Owned Banking Code of Practice.

Ms Monument says no specific percentage figure for breach reporting is expected, given that numbers can be driven by a range of factors that change over time.

“With our experience in compliance and monitoring, we consider zero breaches to be unusual generally. We know that things can go wrong in any organisation, even one with the best compliance frameworks in place. If a subscriber is reporting zero breaches, the compliance and monitoring team will seek to understand why,” she says.

“When a subscriber identifies a breach, we expect it to examine and address the root causes to prevent it occurring again. This practice of improvement results in shifts and changes in the numbers and types of reported breaches over time.”

The IBCCC annual report shows that manual error was the top cause of breaches, followed by staff not following processes and procedures.

Most breaches were remediated in the short-term by an apology to the client or additional training, while training and changes to processes were the main long-term responses.