The National Insurance Brokers Association (NIBA) has reiterated that commissions should remain, ahead of a review next year into the remuneration model as recommended by the Hayne royal commission in its final report.

NIBA’s latest defence of commissions was in response to the Australian Small Business and Family Enterprise Ombudsman’s (ASBFEO) call for a ban on such payments to brokers.

The ASBFEO says commissions are “conflicted remuneration” in its insurance inquiry report last December, arguing they should be banned to protect consumer interest. It is one of 15 recommendations made by the Ombudsman.

But NIBA disagrees, saying it is “disappointed that ASBFEO has recommended a ban of so-called conflicted remuneration”.

“NIBA strongly rejects the proposition that commissions are inherently conflicted,” the peak body said.

“Despite findings by the [Hayne] royal commission of commission payments leading to poor consumer outcomes in other areas of financial services, no such evidence was found in the intermediated general insurance industry.

“In fact, the royal commission found no evidence of misconduct by general insurance brokers despite brokers being well within the commission’s terms of reference.”

NIBA also referred to dispute statistics to defend the commission model, saying complaints against brokers made up less than 8% of small business insurance cases lodged with the Australian Financial Complaints Authority (AFCA) in the last financial year.

“Further evidence of brokers’ commitment to their clients’ best interest can be seen in the extremely low number of AFCA complaints against insurance brokers,” NIBA said.

NIBA also expressed disappointment that the Ombudsman did not call for an end to insurance-based taxes.

It backs the recommendation that these taxes should be clearly identified but says it fails to see how the suggestion will result in better outcomes for Australian businesses.

NIBA says overall the report makes many recommendations that will bring considerable benefits to the affordability and availability of insurance for small businesses and consumers.

“Many findings of the report match the experiences of our members, both as intermediaries and many as small businesses themselves,” NIBA said.