2023 Updates to the Broker Code – what you need to know



Meet the Speaker:

Tetiana George is the the CEO and Co-founder of Curium. Curium specializes in insurance claims and compliance, helping various players in the insurance industry get their compliance and claims right. We make sure the fundamentals are in place.

Recent Changes to the Code:

The focus of the webinar is the recent update to the Broker Code of Conduct. The Code was updated and published by the committee last year, and it became effective in November. However, there was a significant update that took place on November 1st this year, and that’s what we’re going to discuss in detail.

Understanding the Update:

As of November 2023, the primary change is Section 6.1, which relates to disclosing remuneration. If you’re a code subscriber, you are already bound by this update. This change applies explicitly to brokers dealing with retail clients.

Defining Retail Clients:

A crucial aspect is understanding who falls under the category of retail clients. According to the Corporations Act, retail clients include not just individuals or small businesses with fewer than 20 employees (or 100 for manufacturers) but also those receiving advice on retail products, such as motor insurance, travel insurance, home insurance, sickness, and accident insurance, among others. Both criteria must be satisfied for the rule to apply.

What the Code Requires:

Section 6.1 of the Code obliges brokers dealing with retail clients to disclose their remuneration for a specific policy. This disclosure should cover commissions, fees, non-monetary remuneration from insurers, and any client-paid fees. The critical point is that this disclosure must occur simultaneously and through the same communication channel as when general advice is given.

Implementation and Best Practices:

To implement this change effectively, brokers need a robust process. It’s crucial to determine whether your business deals with retail clients and products, as this dictates the extent to which the Code applies. For those who do, the Code now requires a client-by-client approach to disclosure, which means having a clear process and documentation for each client.

Other Code Changes:

Apart from Section 6.1, there have been minor clarifications and extensions in the Code that apply to all brokers. These changes emphasize better communication with clients, ensuring they understand the costs, risks, and benefits of their insurance.

How Curium helps Brokers navigate Compliance – Real-Life Example:

A 20 people brokerage has approached Curium to improve their compliance. All of their staff got onboarded onto the platform within 30 minutes and received training on the basics of Compliance. The results showed a significant increase in identifying incidents and breaches and significant improvements of management productivity.

In a Nutshell:

In conclusion, the updates to the Broker Code of Conduct primarily revolve around the requirement to disclose remuneration for retail clients and products. The key to compliance is understanding the definitions, setting up robust processes, and ensuring timely and clear disclosures. Compliance is not just about ticking boxes; it’s the foundation for a successful and reliable operation.

Moving Forward:

If you have further questions or need assistance with your compliance processes, we’re here to help you navigate the evolving landscape of insurance regulations.

If you have questions, please post them in our community.