Brokers are starting to receive copies of the revamped Insurance Brokers Code of Practice, which also outlines how the new Code Compliance Committee will work.

The Financial Ombudsman Service (FOS) administers the code, and the new committee is being established as an independent body to oversee compliance.

The National Insurance Brokers Association (NIBA) launched the code at its convention last year, but decided soon after to update it. The new document is substantially the same, but NIBA CEO Dallas Booth says it is now easier to read.

“It is one of the first finance sector industry codes in the world that does not look like an act of parliament,” he told insuranceNEWS.com.au.

Brokers can use the code to show clients their professionalism and commitment to quality advice, Mr Booth says.

NIBA has retained the 12 core points from last year’s document and also prepared brochures for staff and clients.

The code sets out requirements on remuneration and brokers’ obligation to act honestly and with integrity. It also covers conflicts of interest, appropriate handling of money and premiums and dispute resolution.

The Code Compliance Committee will comprise an independent chair, a consumer representative and a broker representative.

FOS Code Compliance and Monitoring GM June Smith told insuranceNEWS.com.au the committee will investigate any allegations of non-compliance and will work on further improving service standards in the industry.

Although her team at FOS will provide the committee secretariat, she says it will operate separately from the service’s external dispute resolution work.

“The code committee sits above any minimum legal requirements. This is about engagement and relationships and the ethical and professional response that insurance brokers have to their clients.”

Dr Smith says code compliance committees are standard in financial services and provide all stakeholders with comfort that their guidelines will be independently monitored.

The new brokers’ code comes into force on January 1.