The Insurance Brokers Code of Compliance Committee (IBCCC) has urged Australian insurance brokers to report breaches following the concerning results of its latest annual data report.
The report, which analysed the performance of insurance brokers subscribed to the Insurance Brokers Code of Practice, found that over half of the brokers reported zero breaches in 2021.
IBCCC chair Oscar Shub said reporting breaches was a significant aspect of compliance.
“While reporting zero breaches of the code may sound impressive, it does not necessarily mean a subscriber is doing well,” Shub said. “It generally means that there are deficiencies in the processes and systems used to monitor compliance. We know that breaches will occur from time to time, even with the best compliance frameworks in place. So, reporting no breaches does not reflect perfection as much as it reflects poor monitoring and a failure to embrace a culture of reporting.”
Shub said a culture of reporting enables insurance brokers to learn, improve, and raise standards.
“We know that subscribers that really embrace reporting have made vast improvements,” he said. “They have learned lessons from their breaches. They have processes and systems to minimise them and pursue good outcomes for clients.
“Put simply, identifying and reporting breaches and complaints is everyone's job. A good compliance culture needs staff at all levels capable of identifying and reporting. Leaving it to certain teams or individuals undermines efforts to properly monitor compliance and does not produce the results we want to see.”
The IBCCC's annual data report provides a comprehensive look at the data from subscribers' annual compliance statements. It can be used to increase awareness of issues and develop better practices to provide better client outcomes.
The latest report revealed that multiple insurance brokers across Australia claimed they received no complaints and reported no breaches of the code of practice in 2021.
The new version of the code, which took effect on November 1, 2022, seeks to improve reporting across the board – with the amendments resulting from the committee's focus on cultural change, encouraging brokers to develop a culture embracing reporting in pursuit of better outcomes.
