Reporting zero breaches and complaints is “not indicative of flawless compliance”, brokers have been warned as they prepare to submit their annual code of practice statements.

Insurance Brokers Code Compliance Committee Chair Oscar Shub says he expects an improvement in compliance reporting after the body published a guide to help subscribers strengthen internal monitoring processes.

The committee has repeatedly voiced concerns over reporting practices, especially after 2022’s compliance statements in which 45% of code subscribers reported no breaches and 39% said there were no complaints.

“It is imperative that brokers uphold the highest standards of transparency and accountability in reporting breaches and complaints,” Mr Shub said. “Reporting zero breaches and complaints throughout an entire year is not indicative of flawless compliance but rather raises questions about the effectiveness of internal reporting mechanisms.”

The committee says the guide addresses the prevalence of brokers reporting no breaches.

“All brokers must report breaches of the code. Report all complaints, even if they are about an insurer or resolved immediately,” the guide says.

But one broker told insuranceNEWS.com.au the requirement to record all complaints against insurers “makes no sense”.

“If it’s partly the broker’s service that has contributed to the complaint, then fair enough,” he said. “But if we’ve done all we can and the complaint is only about the insurer, then why should it be recorded as a complaint against us?

“We get complaints about insurers on a daily basis, so the form is going to fill up pretty fast. I know they’re worried about brokers recording zero complaints, but this is contrary to common sense.”

The guide says too many brokers do not understand they must report all complaints they receive. It says the latest industry code of practice, effective from November 2022, requires complaints to be directed to the broker in the first instance.

“Therefore, any complaint made to a broker by a client must be recorded in line with [the Australian Securities and Investments Commission’s] internal dispute resolution data reporting handbook.”

The National Insurance Brokers Association, which owns the code, has been working with the compliance committee to educate brokers and improve the reporting mechanisms that have created issues in the past, CEO Phil Kewin says.

“Accurate reporting not only instils community trust but also serves as learning and development opportunities for brokers, while providing good insights into the practicality and effectiveness of the code itself to aid future enhancements,” he told insuranceNEWS.com.au.

“As the reporting deadline is only a few weeks away, we encourage brokers to complete their annual compliance statements in an accurate and timely manner.”

Click here for the guide.