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What you need to know about the new broker’s code
Come November 1, the latest version of the Insurance Brokers Code of Practice will take effect, having gone through several rounds of consultations with consumer groups, regulatory bodies and other stakeholders.
As brokers, we’ve always put our clients first. But now it’s official: brokers will be held to the highest standard with the commencement of the new code in a few months’ time, with all of its provisions designed to strengthen existing safeguards for consumers.
Developed by the National Insurance Brokers Association (NIBA), the code commits the broking peak body’s members – and also non-members who are subscribers – to a list of conduct standards in their interactions with existing and prospective clients.
The code aims to guide subscribers and consumers on what to expect, and sets out the principles that shape the way brokers behave, deal with people and make decisions. And that’s important as your business and your insurance needs are our priority when we interact with insurers on your behalf.
Whether it’s securing the best rate, the best cover or helping you with a claim, we seek to get the best outcome for you.
The revamped code contains a number of significant enhancements from the previous version, including an obligation to report other brokers who have breached the code, a ban on preferential remuneration, increased disclosure requirements and the obligation to identify and support vulnerable clients.
We are working hard between now and the November 1 commencement date to prepare for the new code. There’s plenty of preparation work happening as we train our staff to make them familiar with the new obligations we are all expected to abide by.
Nevertheless, we thought it is also timely to update you, our client, on what you can expect from us come November 1. So here are some of the key provisions in the new code:
Disclosing what we earn
When acting on a client’s behalf we will not receive any contingent remuneration including volume-based commissions or profit-sharing arrangements or preferential remuneration (such as over-rider commissions) from an insurer.
Terms of engagement
This will include information on the remuneration we will earn by arranging insurance policies and/or providing advice on insurance cover.
If a claim is unreasonably denied or reduced by the insurer, we will act as your claims advocate to try to get the claim paid to the extent covered by the terms of engagement.
Transparency and accountability
We will hold each other accountable for the promotion and implementation of the code, and for observing code obligations.
We, our staff, and representatives are bound to act honestly and with integrity in all dealings.
Who we act for
When a client engages us as their insurance brokers and/or risk advisers, we have a duty to act on their behalf and in their best interests. While engaged by a client, we will not act for an insurer or another party where doing so would be contrary to our client’s best interests.
We will ensure we and our staff maintain and improve our competence through relevant qualifications, continued education and training.
As you can see, the code of practice is a document that formalises what we’ve always believed in and practiced: that is, you as our client will always be treated honestly and openly, and our sole focus will be on your needs.