Latest IBCCC report finds “widespread good practice” in Code compliance amongst brokers

The Insurance Brokers Code Compliance Committee (IBCCC) has released an Own Motion Inquiry report called Good Practice and Company Culture, finding that many brokers have established good processes and procedures to build a company culture that encourages good behaviour and Code compliance.

As a follow-up to the Culture is Key report published last year, the new report summarises key findings on company culture from the responses supplied by brokers in the 2021 Annual Compliance Statement questionnaire.

According to these findings, many brokers have established good processes and procedures in place to facilitate good behaviour and Code compliance, with broker responses indicating widespread good practice.

76 per cent of brokers reported having procedures in place to identify breaches or potential issues, and 66 per cent of brokers reported using regular staff training sessions to learn from past Code breaches.

67 per cent reported using checklists to ensure clients were provided with all necessary information, and 65 per cent also reported conducting an external compliance audit within the past three years to identify gaps or weaknesses in their compliance processes.

NIBA CEO Philip Kewin said, “it was very encouraging to see brokers setting standards above the minimum as well as learning from past breaches.

“Considering the introduction of the new Code of Practice and a renewed focus on process, procedures and compliance, we should see continuous improvement and ongoing development.”

The IBCCC also identified various areas of improvement for brokers, in particular incorporating different training methods, proactively monitoring breaches, and looking for systemic breaches.

The IBCCC also provided the following recommendations for subscribers to build a company culture encouraging good behaviour and Code compliance:

Policy renewal standards

Set an internal benchmark for renewals that is higher than the legal minimum, such as 21 to 28 days in advance of policy expiring. This demonstrates an awareness of good practice and a commitment to high standards.

Internal training

Use multiple methods to train staff around past breaches and lessons learnt, such as holding training sessions, incorporating training into existing regular meetings, and sharing written updates on time-sensitive issues.

Conducting audits and detecting breaches

Conduct regular, structured internal audits across a broad sample of files. Aim to conduct external compliance audits every 12 to 24 months. Create reports for when things don’t go according to plan, and encourage staff to declare breaches, conflicts or compliance issues.

Adapting practices to the client’s perspective

Disclose information on fees and commissions in plain English and in multiple documents, and explain them to clients. Explore using different methods to explain, such as short videos.

Identifying systemic breaches

When a breach occurs, consider whether it may be systemic and occurring multiple times. Make the effort to understand its root causes, and to investigate if similar events may have affected other clients.

To read the full report, visit the IBCCC website here.