The Insurance Brokers Code Compliance Committee is to focus on the professionalism of the industry as breach reporting rises in the industry.
Julia Davis, consumer representative on the Insurance Brokers Code Compliance Committee, said that while professionalism isn’t defined within the code, it is an area of focus for the coming year and something brokers need to address before the Government can take action.
“Professionalism is a really big issue; it is something we are focusing on now,” Davis told
Insurance Business. “Brokers want to be seen as professionals, they don’t want to get lumped in with the financial scandals that have happened. However, at the same time there is no formal, compulsory education for insurance brokers like a university degree.
Search and compare insurance product listings for Professional Services from specialty market providers here
“A lot of other financial services are getting pushed into needing to have certain qualifications. If you can’t really show that you are a really professional industry then the Government is going to do what it has done to these other industries and force you to have certain qualifications.”
The Insurance Brokers Code Compliance Committee will launch an investigation into professionalism in the broking community this year as it looks to further understand the issues facing brokers both large and small, Davis said. With the financial services industry in Australia increasingly under the microscope, Davis said that “now is the time” for brokers to get on top of compliance and professionalism to ensure that the industry is seen as “reputable, professional, and trustworthy”.
In terms of the most common breaches to the Insurance Brokers Code of Practice, Davis highlighted that the committee saw an uptick in failing to contact clients within 14 days of renewal or policy expiration which was “concerning”.
“That is a breach of the code but also a breach of the law which could affect brokers’ licenses, and it has a real impact on clients,” Davis said. “If you are not giving them notice, or enough time, that their insurance is about to expire then you can imagine what sort of consequences that might have.”
The Insurance Brokers Code Compliance Committee annual review noted that self-reported breaches from brokers doubled over the past year which is a positive step for the industry, Davis said.
“I think there is still a culture against whistleblowing and a culture where they see breaches as a black mark,” Davis continued. “I think that has got to come from the top down, especially the big brokerage firms where reporting breaches is seen as a positive thing – you are seen as getting on top of it and now we can think about what changes need to happen so it doesn’t happen again.”
Related stories:
Corporate watchdog seeks feedback on reforms to the sale of add-on insurance
ANZIIF scraps observational assessment requirement from refreshed compliance unit
