Brokers need to take their code of practice obligations more seriously given concerns about low levels of breach self-reporting, the code’s compliance committee has warned.

The number of self-reported breaches increased 32% in the past year, but 57% of subscribers reported no breaches, the Insurance Brokers Code Compliance Committee Annual Review shows.

“Self-reporting of breaches has improved but we remain concerned that the majority of code subscribers reported nil code breaches,” Committee Chairman Michael Gill said.

“Brokers should be actively encouraging code breach self-reporting by increasing the awareness of staff at all levels to understand why the code exists and what their obligations are to clients.”

A 22% drop in the number of large organisations that self-reported was “significant” given best practice for firms of that size is a self-reporting rate of 100%.

Manual error and a failure to follow processes and procedures were the two main reasons for code failures, a possible indication that improved training is required.

Mr Gill says it is important, in the wake of the Hayne royal commission, for brokers to demonstrate they are meeting code service standards and responding to client concerns in a fair and reasonable manner.

The committee urged the National Insurance Brokers Association (NIBA) to act quickly to strengthen the code and “to be intolerant of those who pay lip service to their code commitments”.

Mr Gill says changes should ensure the code will provide consumers and small businesses with better outcomes, consumers should have the ability to access information about the compliance of individual subscribers and stronger sanctions should include the use of publicity.

Several recent “own motion” inquiry reports have found recommendations for improvement by the committee are not being taken seriously or are being ignored, the annual review says.

“It is clear to the committee that code subscribers need to do better when it comes to embedding a culture of good industry practice within their businesses,” Mr Gill said.

Code subscribers received 1049 complaints that were handled via their internal dispute resolution processes – only two more than in the previous year.

About 60% of complaints related to service levels, particularly in the area of claims.