Consumer group urges brokers to be proactive on remuneration – Local – Insurance News
Consumer group urges brokers to be proactive on remuneration
11 July 2022
The Consumer Action Law Centre has urged brokers to be proactive in reviewing remuneration arrangements, even as implementation of a disclosure part of the new code of practice is delayed by a year.
“We call on brokers to consider whether they can disclose commissions in accordance with the code’s new requirements, notwithstanding the delay in its implementation,” Consumer Action CEO Gerard Brody says. “Brokers should not use the delay to avoid being upfront about the remuneration.”
The National Insurance Brokers Association (NIBA) said last week that Section 6.1 of the code, titled disclosing remuneration, would come into effect from November 1 next year due to IT system and process issues. The remainder of the document, including action on volume-based commissions and profit-sharing arrangements, will be implemented on schedule this November.
Consumer Action says brokers should move ahead on areas related to remuneration before the document’s official start date.
“Brokers can also be proactive in reviewing remuneration arrangements to ensure that they do not cause conflicts of interest, in accordance with clause 6.5, even ahead of the code coming into effect later this year,” Mr Brody tells insuranceNEWS.com.au.
NIBA CEO Phil Kewin told members in a note last week that the group would continue to engage to ensure brokers are well positioned to implement the new code.
“We have always stated that the code was intended to be a living document and that NIBA would make amendments to ensure the code remains relevant to all members and their clients,” he said.
Mr Kewin says self-regulation is a privilege that brokers have earned through the demonstration of their commitment to professionalism and ethical behaviour.
“The 2022 Insurance Brokers Code of Practice demonstrates this commitment to clients, regulators and the broader community and forms an important part of NIBA’s response to the Treasury’s Quality of Advice review,” he said.