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Draft broker code sparks call for improvement

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A draft version of the next broking code of practice requires a further overhaul to effectively drive higher standards, the Code Compliance Committee says.

The code must go beyond the law wherever possible, focus on culture and use plain language that assists consumers, a submission says.

“The current draft version needs simpler language and must include the ethical obligations that would lift code obligations beyond legal compliance,” it says.

The code compliance committee also says proposed changes around remuneration transparency need to go further.

“The key issue cannot be information disclosure or transparency, brokers need to commit to managing and eliminating conflicted remuneration,” it says.

Independent reviewer Marigold Magnaye is reviewing submissions and other feedback in response to a discussion paper and draft code revisions prepared by the National Insurance Brokers Association (NIBA).

Ms Magnaye is due to deliver a final report to the NIBA board by July 30, although a timeline in the discussion paper allows scope for additional consultations and the release of a further draft paper, if required.

NIBA has previously said the draft code changes reflect “initial thoughts” and design, layout and readability issues will be addressed before the document is finalised.

“We take very seriously the submission from the code committee and the other submissions we have received,” CEO Dallas Booth told insuranceNEWS.com.au.

“The timetable allows quite a significant period of time for both the reviewer and NIBA to give very careful thought to the submissions. This is a transparent process.”

The updated code of practice is expected to be launched at this year’s NIBA convention, before coming into effect later next year.