The National Insurance Brokers Association has released a guide for code of practice subscribers that advise on and arrange strata insurance.

It sets out the obligations of brokers and their authorised representatives such as strata managers, and outlines how they are expected to handle conflicts of interest and remuneration disclosures.

The guide says rising premiums and availability issues in the strata sector mean “the conduct of strata managers, insurance brokers and the relationship between them has come under scrutiny. The Insurance Brokers Code of Practice is an important part of the broking profession’s commitment to clients and the broader community.

“The guidance helps subscribers interpret how these principles apply to the provision of strata insurance products as well as clarifying obligations for representatives of code subscribers, including strata managers who have entered into an authorised representative arrangement.”

Brokers often have arrangements with strata managers, who become their distributors or authorised representatives, according to the guidance.

“When performing services under these arrangements, strata managers are required to comply with the code. It is the subscriber’s responsibility to ensure that all representatives are meeting their obligations under the code.”

The guide says brokers should make training available to all representatives, as code subscribers will be liable for any breach by their ARs.

On remuneration, the guide says under the code, “subscribers are required to disclose commissions to all retail clients. This includes commissions paid in relation to residential strata policies.”

Code subscribers must also disclose any additional fees payable by the client. “This obligation applies to both brokers and strata managers acting under an authorised representative or distributor arrangement.”

Click here for the guide.