National Insurance Brokers Association CEO Richard Klipin made his first major public appearance in the role this morning, appearing before a Senate hearing on the government’s financial advice reform program.

Mr Klipin, who formally took over as CEO from Phil Kewin more than two weeks ago, says NIBA supports the reforms’ objective as outlined in the first tranche of changes following the Quality of Advice Review.

In his opening remarks, he told the Senate Economics Legislation Committee the proposed regulatory changes “ensure that financial advice including general insurance advice remains accessible and affordable for all Australians.

“The role of a broker in serving ... clients and their broader communities has never been more important as Australians are facing increased risks due to increased frequency and severity of natural disasters. In light of this, balancing the need for accessible and affordable advice has never been more important.”

The Senate committee is examining the first tranche of reforms contained in the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 [Provisions].

It is expected to report by next Thursday.

NIBA and Council of Australian Life Insurers representatives appeared in the first session of the hearing today and were asked about wording errors in draft legislation that accidentally banned commissions for provision of general advice. 

Asked how bad the drafting errors were, Mr Klipin said: “We’re comfortable that the drafting errors were addressed, they were addressed swiftly ... the unintended consequences have been addressed and managed and we’re pretty focused now on the future. We’re comfortable to learn what we’ve learnt but very much focused on the future.”

On Tuesday, Treasury opened consultation on draft legislation after fixing the wording mistakes.

An explanatory statement from Treasury says if a retail client receives general advice for a financial product, benefits paid to the licensee or authorised representative will continue to be exempt from the ban on conflicted remuneration. “Informed consent of the client is not required to be obtained under these circumstances.”

In the first tranche of reforms, general insurance brokers are required to obtain commission consent from retail clients if personal advice has been or is likely to be provided.