Breaking: Latest IBCCC Annual Report welcomes new Code of Practice as “perfect opportunity” to improve culture

The Insurance Brokers Code Compliance Committee (IBCCC) has published their 2021-22 Annual Report, flagging the 2022 Insurance Brokers Code of Practice as the “perfect opportunity” for brokers to “improve their processes and develop culture that puts clients first”.

Culture remains key

Echoing the ‘Culture is Key’ theme of its previous annual report, the latest IBCCC report stresses the critical role of company culture in encouraging compliance and best behaviour in the broking industry.

According to high-level data from the Annual Compliance Statement (ACS), there has been slight increases to Code subscribers reporting on breaches and complaints in 2021. Less than half of Code subscribers reported on breaches (compared to 44 per cent in 2020) and 55 per cent reported on complaints (compared to 52 per cent in 2020).

Despite these figures, the IBCCC flagged concerns with the lack of self-reported breaches and complaints, finding that multiple Code subscribers reported no breaches or complaints in 2021.

In the report’s opening message, Oscar Shub, Chair of the IBCCC, states, “Simply not reporting does not mean you are doing well. We must overcome the misguided belief that not reporting avoids damage to your reputation. True compliance is the goal here and it is important to remember that a strong framework for reporting, recording and monitoring breaches and complaints is essential.”

The IBCCC has welcomed the new 2022 Insurance Brokers Code of Practice as an opportunity to rethink and change this culture, with several new obligations designed to benefit consumers and strengthen their trust in the broking industry.

Oscar Shub states that “The new Code provides Code subscribers with the perfect opportunity to improve their processes and develop culture that puts clients first”, and encourages brokers to familiarise themselves with the new obligations ahead of the new Code coming into effect on 1 November 2022.

NIBA CEO Philip Kewin commented that the report exemplifies the value of ongoing reporting and feedback from the IBCCC.

“Reporting breaches is not a bad thing,” he said. “In fact, it can improve internal operations and inbuild a culture of discipline within an organisation. The implementation of the new Insurance Brokers Code of Practice provides a great opportunity for brokers to re-evaluate and refresh their processes, while educating their staff on the provisions of the Code.”

A follow-up to the IBCCC’s Culture is Key report last year is scheduled for publication later this month, and will report on company culture and how subscribers have implemented recommendations from the previous report.

Snapshot on Code breaches and complaints in 2021

• The number of self-reported Code breaches increased by 7 per cent to 3,570 in 2021, with the most common breaches being a failure to comply with obligations when buying insurance on behalf of clients and a failure to comply with legal obligations.
• 2021 saw a notable increase in breaches concerning the scope of covered services, and a decrease in breaches concerning money handling.
• In total, Code breaches affected 20,500 clients with a financial impact of approximately $3.2 million.
• The number of self-reported complaints decreased by 2 per cent to 1,742 in 2021.
• The most common complaints were in relation to home building cover or commercial property, and delays in claim handling, delays in general service, and issues with premiums.
• Over two-thirds of the complaints (69 per cent) were resolved within 21 days, with providing the requested service and providing an apology being the two most common resolutions.

The IBCCC will publish its Annual Data Report in November 2022, providing subscribers with further insight, analysis and recommendations on breaches and complaints.

A copy of the full IBCCC Annual Report 2021-2022 can be accessed here.