The Insurance Brokers Code Compliance Committee (IBCCC) has announced that it has sent letters to three insurance brokers, sanctioning them for repeated failures to report breaches and complaints data. The sanction is a referral to the National Insurance Brokers Association (NIBA) for possible further action. The names of the offending brokers were not revealed.
Some industry stakeholders believe that tougher penalties are needed for brokers who breach the Insurance Brokers Code of Practice. “There is a clear case for the IBCCC to be given greater power to impose meaningful sanctions,” said Tyrone Shandiman, chair of the Australian Consumers Insurance Lobby (ACIL). “What is the point of having a Code if there are no meaningful consequences for breaching it?”
Industry Reaction
Shandiman believes that the Code must be enforceable and that the IBCCC should have greater powers to impose sanctions that deter non-compliance and protect consumer trust. “Without that, the Code risks being a symbolic gesture rather than a practical tool for accountability,” he said. The Australian Consumers Insurance Lobby also believes that brokers should be named, particularly in cases of repeated non-compliance.
NIBA’s CEO, Richard Klipin, said that the IBCCC’s announcement was “clear evidence that the independent monitoring and enforcement arrangements under the Insurance Brokers Code of Practice are operating effectively.” The NIBA board will now consider the matter.
Importance of Compliance
The IBCCC’s chair, Oscar Shub, highlighted the importance of submitting annual compliance statements, stating that they are “a basic and essential obligation for every insurance broker that subscribes to the Code.” The three brokers sanctioned had failed to meet the March 31 deadline for the third consecutive year, despite multiple reminders and clear guidance from both the IBCCC and NIBA.
The IBCCC found that the brokers’ explanations for their delays were insufficient, citing system issues and competing work pressures. However, the committee noted industry-wide improvements in reporting, with the number of brokers missing the deadline falling from 86 in 2023 to 11 in 2024.
The issue has sparked debate about whether the IBCCC should have more powers to sanction brokers. Insurance Business has reached out to the IBCCC chair for further comment and expects to publish responses soon.
