Only eight of the Queensland floods claim disputes that went to the Financial Ombudsman Service (FOS) were from broker-handled policies.

Speaking at a National Insurance Brokers Association event in Melbourne last week, FOS Dispute Resolution Manager Graham Warner said only eight of the 1300 disputes stemming from the floods involved brokers.

“About half of the broker disputes were settled against the broker,” he said.

Speaking at the same event, Code Compliance Monitoring Committee CEO June Smith said there were other issues stemming from the floods that “aren’t good news to the insurance industry”.

“The lack of transparency by insurers after the Queensland floods was an issue, especially when things were not put in writing,” she said.

Dr Smith says if an insurer makes a promise to a client, they must keep it.

“Due diligence says if you make a promise keep it,” she said. “Don’t make promises to clients you can’t keep.”

Dr Smith says the insurance industry has an “integrity framework” with codes of practice to protect the consumer.

This means compliance with these codes should be an integral part of the businesses of every insurer and broker.

“Compliance shouldn’t come along out of the blue – it should be integral part of a business,” she said. “It is about a culture and how to use that in the business.”

Dr Smith says brokers must keep records of all conversations they have with clients to protect themselves in disputes.

“Note keeping is the best defence in disputes,” she said. “Brokers have lost disputes because the client kept better notes.”

NIBA President David Duffield told the event the NIBA brokers’ code of practice is being reviewed this year.

“We will work with the Australian Securities and Investments Commission, Australian Prudential Regulation Authority and Treasury so they get a good feel of what we are doing,” he said.

“We are held in high regard by all three organisations.”