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  • ๐“๐ก๐ž ๐ฉ๐จ๐ฐ๐ž๐ซ & ๐Ÿ๐š๐ซ-๐ซ๐ž๐š๐œ๐ก๐ข๐ง๐  ๐ข๐ฆ๐ฉ๐š๐œ๐ญ ๐จ๐Ÿ ๐ญ๐ก๐ž ๐ข๐ง๐ฌ๐ฎ๐ซ๐š๐ง๐œ๐ž ๐‚๐จ๐๐ž๐ฌ ๐จ๐ฏ๐ž๐ซ๐š๐ซ๐œ๐ก๐ข๐ง๐  ๐จ๐›๐ฅ๐ข๐ ๐š๐ญ๐ข๐จ๐ง

As the industry continues to be under scrutiny, it’s timely to revisit the overarching obligations in the GI Code & Insurance Brokers Code of Practice.

๐™‚๐™„ ๐˜พ๐™ค๐™™๐™š ๐™ค๐™› ๐™‹๐™ง๐™–๐™˜๐™ฉ๐™ž๐™˜๐™š

Part 3 of the GI Code requires insurers & their distributors & claim service suppliers to be ๐˜ฉ๐˜ฐ๐˜ฏ๐˜ฆ๐˜ด๐˜ต, ๐˜ฆ๐˜ง๐˜ง๐˜ช๐˜ค๐˜ช๐˜ฆ๐˜ฏ๐˜ต, ๐˜ง๐˜ข๐˜ช๐˜ณ, ๐˜ต๐˜ณ๐˜ข๐˜ฏ๐˜ด๐˜ฑ๐˜ข๐˜ณ๐˜ฆ๐˜ฏ๐˜ต & ๐˜ต๐˜ช๐˜ฎ๐˜ฆ๐˜ญ๐˜บ ๐˜ช๐˜ฏ ๐˜ฅ๐˜ฆ๐˜ข๐˜ญ๐˜ช๐˜ฏ๐˜จ๐˜ด ๐˜ธ๐˜ช๐˜ต๐˜ฉ ๐˜ค๐˜ถ๐˜ด๐˜ต๐˜ฐ๐˜ฎ๐˜ฆ๐˜ณ๐˜ด.

Let’s unpack this:

– the obligation extends to underwriting agencies & external insurance claim managers;

– the obligation applies to both retail & wholesale insurance.

– the obligation applies to all dealings including buying insurance, making a claim, dealing with customers experiencing vulnerability & complaints.

– You may ask, how does Part 3 apply to claims for wholesale insurance when, for example ‘Part 8 Making a Claim’ (& Parts 5,6,7,9 & 11), does not apply to wholesale insurance? The individual requirements of Part 8 would not apply to wholesale insurance claims however the insurer & their claim service suppliers must continue to be ‘honest, fair etc..’

– it would be a reasonable interpretation of Part 3 to suggest that each component is a separate obligation. Therefore a failure to act timely (such as in claim delays) would be a breach of the Code.

๐™„๐™ฃ๐™จ๐™ช๐™ง๐™–๐™ฃ๐™˜๐™š ๐˜ฝ๐™ง๐™ค๐™ ๐™š๐™ง๐™จ ๐˜พ๐™ค๐™™๐™š ๐™ค๐™› ๐™‹๐™ง๐™–๐™˜๐™ฉ๐™ž๐™˜๐™š

The Brokers Code, requires NIBA members to have ๐™ฅ๐™ง๐™ค๐™›๐™š๐™จ๐™จ๐™ž๐™ค๐™ฃ๐™–๐™ก ๐™˜๐™ค๐™ข๐™ข๐™ž๐™ฉ๐™ข๐™š๐™ฃ๐™ฉ, ๐™–๐™˜๐™ฉ ๐™š๐™ฉ๐™๐™ž๐™˜๐™–๐™ก๐™ก๐™ฎ & ๐™—๐™š ๐™ฉ๐™ง๐™–๐™ฃ๐™จ๐™ฅ๐™–๐™ง๐™š๐™ฃ๐™ฉ & ๐™–๐™˜๐™˜๐™ค๐™ช๐™ฃ๐™ฉ๐™–๐™—๐™ก๐™š.

Due to Part 8.0, these obligations extend to the brokers employees, agents & authorised representatives.

The Ethical behaviour commitment requires brokers, their staff & [authorised] representatives to act honestly & with integrity in all dealings with clients.

๐˜ผ๐™๐™Ž๐™‡ ๐™œ๐™š๐™ฃ๐™š๐™ง๐™–๐™ก ๐™ค๐™—๐™ก๐™ž๐™œ๐™–๐™ฉ๐™ž๐™ค๐™ฃ ๐™ฉ๐™ค ๐™ฅ๐™ง๐™ค๐™ซ๐™ž๐™™๐™š ๐™›๐™ž๐™ฃ๐™–๐™ฃ๐™˜๐™ž๐™–๐™ก ๐™จ๐™š๐™ง๐™ซ๐™ž๐™˜๐™š๐™จ ๐™š๐™›๐™›๐™ž๐™˜๐™ž๐™š๐™ฃ๐™ฉ๐™ก๐™ฎ, ๐™๐™ค๐™ฃ๐™š๐™จ๐™ฉ๐™ก๐™ฎ & ๐™›๐™–๐™ž๐™ง๐™ก๐™ฎ

The overarching obligations of the Codes complement the AFS Licence obligation to provide financial services efficiently, honestly & fairly, but with one important distinction.

The AFSL obligation only applies to financial services (which of itself is still far-reaching) while the Code obligation apply to all dealings, including administrative or clerical processes.

๐™ƒ๐™ค๐™ฌ ๐™ฉ๐™ค ๐™ž๐™ข๐™ฅ๐™ก๐™š๐™ข๐™š๐™ฃ๐™ฉ

The Code overarching obligations should be viewed as a lens after specific controls are applied. For example, the obligation to update the customer every 20 business days about the progress of their claim may receive a tick, however the question then needs to be asked, where we ‘๐˜ฉ๐˜ฐ๐˜ฏ๐˜ฆ๐˜ด๐˜ต, ๐˜ฆ๐˜ง๐˜ง๐˜ช๐˜ค๐˜ช๐˜ฆ๐˜ฏ๐˜ต, ๐˜ง๐˜ข๐˜ช๐˜ณ, ๐˜ต๐˜ณ๐˜ข๐˜ฏ๐˜ด๐˜ฑ๐˜ข๐˜ณ๐˜ฆ๐˜ฏ๐˜ต & ๐˜ต๐˜ช๐˜ฎ๐˜ฆ๐˜ญ๐˜บ’?

It is possible to comply with individual Code paragraphs but still be in breach of the overarching Code obligations.