Compliance culture poor on self-reporting, code monitor says

6 October 2022

The Insurance Brokers Code Compliance Committee (IBCC) says it will be looking for an improvement in the level of self-reported breaches after the new code of practice comes into effect next month.

Less than half of code subscribers reported breaches last year, a slight increase on the 44% in 2020, while 55% reported complaints, up from 52%. Multiple subscribers reported no breaches or complaints, which the IBCC says is a concern.

“The lack of reporting breaches and complaints suggests there remains a culture that fails to value self-reporting,” the IBCC annual report says.

“We expect to see this change with the new 2022 code. The lack of reporting may have been the result of the broad nature of the previous code.”

The report suggests some brokers may need to review the way they manage compliance and risk, ensure breaches and complaints are effectively identified and reported, improve staff awareness and training and strengthen monitoring oversight.

Independent Chairman Oscar Shub says a “misguided belief” that not reporting avoids damage to reputation must be overcome.

“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,” he says.

The IBCC says the new code of practice, which replaces the 2014 version, is a significant milestone that will help improve the way the industry operates.

The compliance body also says it has two targeted inquiries scheduled for this financial year, one investigating compliance with governance processes, and the second to focus on compliance with obligations to support clients experiencing vulnerability, which is a key addition to the new code.

The IBCC says it will improve its IT and data capabilities, while working with the Australian Financial Complaints Authority and the Australian Securities and Investments Commission to streamline data and reporting will also be a focus.