Your Legal Protection
All insurance brokerages in Australia must be licensed and must adhere to the Financial Services Reform Act, the Corporations Act, the Insurance Contracts Act, and the Insurance Brokers Code of Practice. The Australian Securities and Investments Commission (ASIC) is the industry regulator that monitors the conduct of Australian Financial Services (AFS) licensees.
Your broker is required by law to act in your best interests. Your broker acts on behalf of you the insurance buyer, not an insurance company. (In some circumstances your broker may act on behalf of the insurance company, but in those cases he or she must inform you of that fact).
Brokers must also subscribe to and be bound by the decisions of the Financial Ombudsman Services (FOS) a service designed to resolve complaints and problems between clients and their brokers.
Insurance transactions can and do involve substantial sums of money and financial risk. As with all other professional and financial services dealings, it pays to seek the extra protection of aligning with members of the peak industry body. For insurance brokers, that body is The National Insurance Brokers Association (NIBA).
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