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Brokersí self-reporting gaps worry compliance committee

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The number of brokers failing to self-report code breaches has been flagged as a concern by the Insurance Brokers Code Compliance Committee.

The committee last week published its annual review, showing that last year 467 code subscribers self-reported 2006 breaches, up 10% on 2018, and 1292 complaints, up 23%.

But almost half of code subscribers, including three of the largest brokers, reported zero code breaches.

“Self-reporting code breaches to the committee is one of the best ways a code subscriber can demonstrate their commitment to achieving a healthy compliance culture and achieving the best possible outcome for their clients,” the report says.

“The committee was pleased to note a 10% increase in the number of breaches self-reported by code subscribers in 2019 compared to the previous year.

“Yet we are concerned to see almost half of all code subscribers continuing to report nil breaches.

“This raises serious questions about the adequacy of these subscribers’ breach detection and reporting mechanisms, the robustness of their compliance frameworks and, perhaps most importantly, their willingness to implement an organisational culture that encourages breach reporting as a way of learning from the outcome and preventing a recurrence.”

The committee says it is also disappointed that the number of complaints resolved within 21 days fell by 4%.

“We expect code subscribers to make a concerted effort to improve their timeframes for handling client complaints during 2020, and we look forward to seeing the results reflected in the next annual Compliance statement.

“The committee believes the industry can further improve breach and complaints reporting.”

As reported by insuranceNEWS.com.au last week, the committee was critical of the National Insurance Brokers Association (NIBA) for significant delays in reviewing its Insurance Brokers Code of Practice.

The current code dates back to 2014, and reviews are intended to be carried out every three years.

The report says it is vital the code is kept up to date, and the committee has met with NIBA six times and written to it seven times to discuss the review.

“Despite ongoing stakeholder consultation since that time, NIBA appears no closer to completing the review and providing insurance brokers, consumer groups and other stakeholders with an updated and improved code.

“The committee has witnessed over this time, a serious erosion of consumer confidence in NIBA and the industry.”

NIBA says it is close to presenting a draft document. External stakeholders will be properly consulted, and there are no fundamental issues with the broking industry or the current code.