The National Insurance Brokers Association says members are committed to meeting their code of practice duties after a surge in reported breaches.

NIBA says the rise was anticipated after a “significant number” of new obligations were added to the updated 2022 code.

The Insurance Brokers Code Compliance Committee yesterday called for improvements after the release of its annual data report for last year. About 63.4% of insurance brokers reported breaches last year, up from 55.2% in 2022, while the number of reported breaches rose 36% to 4642. The breaches affected 794,000 clients, up from 412,081.

The committee flagged remuneration disclosure as a key concern. There were 106 such breaches, compared with 23 self-reported cases a year earlier.

“The data in our report should serve as a wake-up call,” committee chair Oscar Shub said.

“Brokers need to prioritise effective compliance and reporting practices to enhance their service standards and maintain trust with their clients.”

On the remuneration breaches, Mr Shub said the sharp rise "is a clear signal that brokers need to do better".

NIBA says it is encouraged to see more brokers reporting their breaches, with the number of subscribers self-reporting increasing by more than 26% since 2020.

“Given the significant number of new obligations introduced in the revised code, an increase in the number of breaches was anticipated,” the association said.

“The data released by the IBCCC ... demonstrates that the profession is taking steps to adapt to these higher expectations and reflect on their processes to better serve clients.”

NIBA recognises “there is always room for improvement. Over the coming year, [we] will look to engage with our subscribers and the IBCCC on measures to encourage subscribers to report breaches.”

Insurance Advisernet MD Shaun Standfield says the code committee’s comments on compliance outcomes are “disappointing”, because the committee has in the past urged the profession to be more alert to breaches.

“To have the IBCCC make incongruous statements from one year to the next is not helpful,” he told insuranceNEWS.com.au. “They should be applauding the increase ... not telling us to do better.

“We have nearly tripled the number of reportable breaches made to the IBCCC over the past three years, as we have encouraged reporting. I don’t want our advisers and other brokers to read the comments from the IBCCC and then revert to practices of perhaps not reporting as an increase will see more belittling of what all brokers do every day for their clients.”

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