The Insurance Brokers Code Compliance Committee has again pushed for more transparency around remuneration.

It has urged the National Insurance Brokers Association to reinstate a provision requiring subscribers to disclose remuneration arrangements to small business clients in its next code review.

An earlier version of the current code of practice required brokers to inform all individual and small business clients – regardless of whether they are retail or wholesale customers – about how they are paid for their services. But concerns from some broking members over the inclusion of small businesses led NIBA, owner of the code, to drop the requirement in the 2022 document.

“We were displeased with the change,” the committee says in its 2023-24 annual report. “We believe the code should encourage behaviour above the bare minimum obligations of the law, and this was a step back from consumer protection, in particular for small business.

“We will continue to push for reinstatement in the upcoming code review.”

The current code took effect in November 2022, with the provision on remuneration disclosure to retail clients starting a year later, to give brokers time to prepare for the change.

The code is reviewed every three years.

Committee chair Oscar Shub told insuranceNEWS.com.au the body “has engaged with NIBA on this issue. Any changes to the code ... are a matter for NIBA. We have made our position clear and will be working with NIBA throughout the review of the code.”

The report says remuneration disclosure is crucial in helping people make informed decisions and understand the true cost of a broker’s services.

“NIBA’s withdrawal from its prior stated commitment to require remuneration disclosure for wholesale clients in the code was a significant concern for us,” it adds.

NIBA has welcomed the committee’s 2023-24 report but has not commented on the push for the reinstatement of small business remuneration disclosure.

“We appreciate the work undertaken by the IBCCC to promote good practices and improved client outcomes in the intermediated insurance profession,” the association said. “The increase in the number of subscribers self-reporting breaches reflects the success of the work undertaken by the IBCCC and the NIBA working group to simplify and streamline the reporting process.”

About 63.4% of brokers reported breaches in the year, up from 55.2% in the prior period; 66.3% reported complaints, up from 61.1%; and the number of self-reported breaches on remuneration disclosure rose to 106 from 23.

NIBA says it acknowledges the committee’s concerns around remuneration disclosure, but notes: “It is important to highlight that this obligation only took effect in November 2023 and so comparisons to previous reporting periods may not be an accurate reflection of the significant work undertaken by our members to implement the new code obligations.”

The report also says the compliance committee has received eight allegations of code breaches and five are currently being assessed.

They include three allegations of failing to disclose remuneration involving strata insurance products; one of failing to appropriately review and renew policies of new clients after merger activities; and one of failing to disclose conflicts of interest.

Click here for the 2023-24 committee report.