The National Insurance Brokers Association (NIBA) says it can approach 2023 with “greater certainty” after a Quality of Advice Review proposal paper recommended broker commissions should stay. 

Reviewer Michelle Levy is considering ways to change the regulatory system to make access to advice more accessible and affordable, following a recommendation from the Hayne royal commission. 

Part of the review includes looking at the general insurance exemption to the ban on conflicted remuneration. 

“It was with a sense of pride and relief that we reviewed the Quality of Advice Review proposal paper from Michelle Levy in relation to conflicted remuneration,” NIBA CEO Phil Kewin writes in the peak body’s latest magazine.  

“Ms Levy acknowledged the importance of the role of the broker, the fact that the industry had changed, some of which was law and some voluntarily, and therefore acknowledging that we aren’t standing still.  

“I’m certain that our Code of Practice has played a role there. 

“As such, the reviewer also saw that most of the potentially conflicted issues impacting broker remuneration were either being removed, had been removed or could be managed where there was a conflict. 

“This extended to broker commissions – while conceding there may be conflicts, it was acknowledged that they could be managed, and as long as there is full transparency, the benefit of retaining commissions was far greater than removing them.” 

Mr Kewin says that, while the review’s final report is still pending, the proposal paper “gives the strongest indication yet that commissions will be retained, and that we can enter 2023 with a much greater sense of certainty”. 

“There will be more reform to deal with, but the trade-off will be the simplification of advice and hopefully the reduction in cost to serve clients. 

“This gives us a much clearer path for the future, and will enable us to focus more on dealing with the market conditions, rising costs and inflationary pressures, and also introducing opportunities in areas such as technology to improve our customer delivery and back office efficiencies.”  

Ms Levy must provide a final report to government by December 16.