The brokers' code has changed: Here's how
After several rounds of consultations with consumer groups, regulatory bodies, and stakeholders, the revised Insurance Brokers Code of Practice is months away from coming into action.
As brokers, the clients come first; these four words govern much of what we do. But as of November 1, this will be more than the norm - it will be the requirement.
Each provision in the latest version was created to strengthen existing safeguards for consumers. Under the new code, brokers will be held to the highest standard.
The code was developed by the National Insurance Brokers Association (NIBA) and requires broking peak body members and non-members who are subscribers to comply with a set of standards. These standards govern how they interact with both current and potential clients.
The code provides consumers and subscribers with greater clarity around what to expect when dealing with brokers. It does this by detailing the expectation for how brokers behave, deal with people, and make decisions.
As insurance brokers, we liaise with insurers on your behalf and place your business and insurance needs at the forefront.
The revised code introduces various improvements, including mandatory reporting of any broker who may have breached the code. It is also now obligatory to identify and support vulnerable clients, preferential remuneration has been banned, and there are stricter disclosure requirements.
Brokers will therefore we working diligently leading up to November 1 to prepare for when the changes take effect. All brokers need to be across the new code, with training well underway for many.
What are the changes?
Here is a look at a few of the core provisions in the new code, so you can get a better idea of what to expect come November 1.
- Greater disclosure around earnings - Brokers will no longer receive any contingent remuneration when representing their clients. Under the new code, insurers cannot provide brokers profit-sharing arrangements, volume-based commissions, or preferential remuneration.
- Terms of engagement - There will be greater transparency and more information about how much brokers earn by arranging insurance policies or providing advice on cover.
- Claims Management - As your broker, we can advocate for you if your claim is unfairly denied or reduced by the insurer. For brokers, the aim is to get your claim paid while taking the terms of engagement into account.
- Staying transparent and holding each other accountable - Brokers will be expected to ensure that their counterparts comply with the requirements of the code by holding each other accountable.
- Acting ethically - In all interactions with clients, brokers are bound to communicate honestly and with integrity. This applies to all team members, including our employees and any representatives.
- We act in the client's best interest - When working with clients, brokers act on their behalf and ensure the client's best interest are represented. Therefore, a broker does not act for an insurer or another part, which would go against a client's best interests.
- Professional commitment - We are constantly striving to do better and ensure our employees have the opportunity to excel in their professional lives through relevant qualifications, ongoing education and training.
How Coverforce can help
At Coverforce, we understand the risks and exposures faced by businesses every day. Our expert insurance brokers will work with you to provide personalised risk advice and quality insurance cover to protect you and your business.
For more information or to arrange cover, get in touch with your local Coverforce Office today.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly
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