The Insurance Brokers Code Compliance Committee (IBCCC) says more brokers are reporting breaches and complaints, but the level of under-reporting continues to raise concerns and it will conduct an inquiry to better understand the issues. 

Encouraging a culture of positive breach reporting has been an IBCCC focus for the past three years and the latest annual report shows that 55% of subscribers reported breaches compared to 48% the year before, while 61% reported complaints, up from 55%. 

“Improvements are commonly gradual and often require a shift in organisational culture, so this small step forward is a measure of success for us,” IBCCC Chairman Oscar Shub said. 

The annual report notes that 175 brokers reported no breaches, while 152 reported no complaints in the 2022 reporting period. 

“While we were happy to see more report their breaches and complaints, it was disappointing to see so many continue to under-report or report zero,” Mr Shub said. 

“This concern remains a serious one. We have put great effort into encouraging better attitudes and practices to compliance and reporting, with some success. But, unfortunately, not all brokers have taken this message on.” 

The IBCCC says things go wrong even in the best organisations and it considers zero breaches to be highly unlikely, and indicative of an organisation lacking the right systems and processes in place to monitor compliance with the Code of Practice. 

“While we acknowledge the broad nature of the previous version of the code may have, in part, contributed to the lack of reporting, we are concerned there is a deeper cultural issue with reporting for many subscribers,” the annual report says. 

The IBCCC says it will conduct an inquiry that will assess information about processes, procedures, monitoring and training to understand the culture towards reporting and look at ways to encourage a more positive compliance outlook. 

IBCCC is also looking into how subscribers prepared and implemented the updated version of the code of practice, which came into effect on November 1, and expects to deliver findings to offer guidance and support for subscribers in establishing good practices. 

Findings from both inquiries are expected to be published late this year. 

The revised code has a greater focus on supporting clients experiencing vulnerability and the IBCCC has inquired into subscribers’ policies, processes and training, with findings to be available early next year. 

The annual report says there were 3405 breaches compared to 3570 a year earlier and 2252 complaints, up from 1742, with breaches having a financial impact of $3.2 million, affecting 412,800 clients. 

The most common cause of breaches was process and procedures not being followed while the most common area of complaints related to service issues. 

National Insurance Brokers Association CEO Phil Kewin says the start of the new code has provided a great opportunity to refresh and reinforce the requirements of subscribers, which has seen an increase in breach reporting. 

 “We feel there is still more opportunity to increase these numbers and will work with the IBCCC to ensure subscribers are not only educated, but the reporting mechanisms are as efficient as possible,” he said.