The National Insurance Brokers Association (NIBA) is seeking feedback on proposed Code of Practice changes that include greater remuneration transparency ahead of the expected release of a finalised document later this year.

NIBA has released a discussion paper from the code independent reviewer, along with a document outlining NIBA’s initial views on possible changes following preliminary consultations with members last year.

CEO Dallas Booth says key improvements proposed include greater clarity over the services clients can expect, or not expect, from their broker and a focus on transparency.

“There is a greater onus on the broker to be transparent in relation to their remuneration in a proactive manner,” he told insuranceNEWS.com.au today.

The discussion paper from reviewer Marigold Magnaye of Asperdel Consulting says feedback suggests the code should set higher standards that go beyond the law and that there should be greater clarity on enforceability and complaints processes.

Proposals from NIBA include that the Code Compliance Committee could direct a member to compensate a client for any direct financial loss or damage caused by a significant breach, up to the amount of $250,000, and that the committee could publish a significant breach.

The new code would include new commitments around the needs of vulnerable clients, following moves made in the Insurance Council of Australia’s (ICA’s) latest code and other financial services sector documents.

“NIBA proposes changes to the code that address developing policies, procedures and training, although it does not go as far as the more detailed changes to the ICA 2020 code,” the discussion paper says.

The review was started in 2018 but progress slowed as the Hayne royal commission completed its inquiry and ICA finalised the latest iteration of its code.

“The delay in progressing the code review has attracted strong criticism from some key stakeholders,” Ms Magnaye says. “It would be an understatement to say that a lot has happened since mid-2019.”

Submissions on the discussion paper are due by April 9 and NIBA aims to submit the revised code to the Australian Securities and Investments Commission for approval in the second half of the year.

A launch at the NIBA convention in October would pave the way for the new code to take effect by mid to late 2022 following training and assistance in implementing the document.

“This is a major piece of work for NIBA this year and we are very much looking forward to the responses from all stakeholders,” Mr Booth said.

More details are available here.