The Financial Ombudsman Service (FOS) and the National Insurance Brokers Association (NIBA) have agreed that the independent body overseeing compliance with the Insurance Brokers Code of Practice will launch on September 5.

Lawyer Michael Gill will chair the three-person Code Compliance Committee, which also includes former NIBA president Steve Lardner and Consumer Credit Legal Centre Policy Officer Julia Davis.

The recently updated code took effect on July 1, and members are already bound by it.

NIBA CEO Dallas Booth says agreeing on the start date is the final step in creating a legal deed that underpins the new FOS-NIBA compliance regime.

“What we have is an arm’s length process, whereby a committee that is independent of NIBA will oversee and report on the administration of the code and, when necessary, review and resolve any failure to comply with the code,” he told insuranceNEWS.com.au.

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

Under the new dispute regime, consumer complaints will initially be considered by FOS GM of Code Compliance June Smith, who acts as code administrator. Dr Smith’s team will open a conciliation process between client and broker; if this fails to resolve the dispute, the matter goes to the Code Compliance Committee.

The committee can make and impose orders and sanctions for code breaches.

Mr Gill, a former long-serving chairman of the general insurance code compliance committee, is also the President of the International Insurance Law Association. He is a former partner and current consultant for law firm DLA Piper, and was honoured last week with an Australian and New Zealand Institute of Insurance and Finance lifetime achievement award.