Insurance Brokers Face Sanctions for Repeated Compliance Failures
The Insurance Brokers Code Compliance Committee (IBCCC) has taken enforcement action against three insurance brokers for failing to lodge their annual compliance statements by the March 31 deadline. This marks the third consecutive year these brokers have missed the reporting deadline despite receiving multiple reminders and guidance from both the IBCCC and the National Insurance Brokers Association (NIBA).
Repeated Non-Compliance Raises Concerns
IBCCC chair Oscar Shub stated that the persistent non-compliance raises broader concerns about the brokers’ systems, governance, and commitment to professionalism. “Annual compliance statements are not optional. They are a basic and essential obligation for every insurance broker that subscribes to the code,” he emphasized.
The brokers cited various challenges, including administrative system issues and workload demands, but the IBCCC concluded that these did not excuse the repeated breaches. Shub added that chronic delays indicate more than just operational hiccups. “Every business faces competing priorities. But three consecutive years of missing a deadline signals a deeper problem. This was not just a one-off oversight,” he said.
Although the three firms eventually submitted their reports and implemented process improvements, the IBCCC stressed that such changes should have been pre-emptive rather than reactive. The committee has referred the brokers to NIBA for potential further action under its membership rules.
ASIC Flags Gaps in Home Claims Oversight
In a separate development, the Australian Securities and Investments Commission (ASIC) has published findings from its review of how general insurers manage home insurance claims, particularly those related to the 2022 flood disasters. The review assessed progress since ASIC’s 2023 “Navigating the Storm” report and involved seven major insurers.
ASIC identified improvements in oversight of builders and repair contractors but noted inconsistent supervision of technical experts. The regulator found that claims teams were often expected to verify expert reports without having the necessary technical knowledge. ASIC also raised concerns about how insurers communicate cash settlement options to policyholders, finding that the information provided was often minimal and difficult to understand.
Regulatory Expectations and Industry Outlook
ASIC stressed that insurers must take immediate steps to address the identified issues rather than waiting for future disaster events to expose weaknesses. The Insurance Council of Australia is developing a revised General Insurance Code of Practice, with a completion target set for 2026. ASIC has urged insurers not to delay necessary reforms in the interim.
The outcome of the IBCCC’s enforcement action should serve as a warning to all brokers that timely reporting is crucial and reflects the integrity of their business and commitment to the code. With ongoing compliance requiring sustained focus, the industry remains under regulatory scrutiny to maintain high standards of governance and professionalism.
