Small brokers are in the spotlight as ASIC mounts another campaign to review their compliance. The latest move, announced last week, targets NSW brokers. It’s understood the regulator will concentrate on brokers with small premium incomes to assess their compliance with sections 26 and 27 of the Insurance (Agents & Brokers) Act.

NIBA has been consulted by ASIC, and is keeping a watching brief on the review on behalf of broker members. CEO Noel Pettersen said the review – the latest in a number of similar exercises mounted by ASIC – is not harmful to brokers who are complying with the law. “At this time, when we’re still dealing with the HIH issue, it’s important that brokers are seen to be fully complying with the rules. If it ferrets out some operators who aren’t acting properly, that’s fine.”

ASIC Director Lucienne Layton said the review will examine the system reports and account statements of a “selected group” of general insurance brokers. Brokers must be able to account for all monies received from their clients on trust, and they should maintain accounting records detailing each financial transaction.

 “While our focus is to evaluate compliance, we do not rule out taking enforcement action against any brokers who have significantly breached the Act,” Ms Layton said.

While some brokers have been uneasy with the continued attention being displayed by ASIC, the regulator is happy to point to a number of prosecutions of brokers over the past year to justify its actions. The review will not take long, with a report on the results of the project expected to be available for discussion in June.