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.
𝙂𝙄 𝘾𝙤𝙙𝙚 𝙤𝙛 𝙋𝙧𝙖𝙘𝙩𝙞𝙘𝙚
Part 3 of the GI Code requires insurers & their distributors & claim service suppliers to be 𝘩𝘰𝘯𝘦𝘴𝘵, 𝘦𝘧𝘧𝘪𝘤𝘪𝘦𝘯𝘵, 𝘧𝘢𝘪𝘳, 𝘵𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘵 & 𝘵𝘪𝘮𝘦𝘭𝘺 𝘪𝘯 𝘥𝘦𝘢𝘭𝘪𝘯𝘨𝘴 𝘸𝘪𝘵𝘩 𝘤𝘶𝘴𝘵𝘰𝘮𝘦𝘳𝘴.
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.
𝙄𝙣𝙨𝙪𝙧𝙖𝙣𝙘𝙚 𝘽𝙧𝙤𝙠𝙚𝙧𝙨 𝘾𝙤𝙙𝙚 𝙤𝙛 𝙋𝙧𝙖𝙘𝙩𝙞𝙘𝙚
The Brokers Code, requires NIBA members to have 𝙥𝙧𝙤𝙛𝙚𝙨𝙨𝙞𝙤𝙣𝙖𝙡 𝙘𝙤𝙢𝙢𝙞𝙩𝙢𝙚𝙣𝙩, 𝙖𝙘𝙩 𝙚𝙩𝙝𝙞𝙘𝙖𝙡𝙡𝙮 & 𝙗𝙚 𝙩𝙧𝙖𝙣𝙨𝙥𝙖𝙧𝙚𝙣𝙩 & 𝙖𝙘𝙘𝙤𝙪𝙣𝙩𝙖𝙗𝙡𝙚.
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.
𝘼𝙁𝙎𝙇 𝙜𝙚𝙣𝙚𝙧𝙖𝙡 𝙤𝙗𝙡𝙞𝙜𝙖𝙩𝙞𝙤𝙣 𝙩𝙤 𝙥𝙧𝙤𝙫𝙞𝙙𝙚 𝙛𝙞𝙣𝙖𝙣𝙘𝙞𝙖𝙡 𝙨𝙚𝙧𝙫𝙞𝙘𝙚𝙨 𝙚𝙛𝙛𝙞𝙘𝙞𝙚𝙣𝙩𝙡𝙮, 𝙝𝙤𝙣𝙚𝙨𝙩𝙡𝙮 & 𝙛𝙖𝙞𝙧𝙡𝙮
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.
𝙃𝙤𝙬 𝙩𝙤 𝙞𝙢𝙥𝙡𝙚𝙢𝙚𝙣𝙩
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 ‘𝘩𝘰𝘯𝘦𝘴𝘵, 𝘦𝘧𝘧𝘪𝘤𝘪𝘦𝘯𝘵, 𝘧𝘢𝘪𝘳, 𝘵𝘳𝘢𝘯𝘴𝘱𝘢𝘳𝘦𝘯𝘵 & 𝘵𝘪𝘮𝘦𝘭𝘺’?
It is possible to comply with individual Code paragraphs but still be in breach of the overarching Code obligations.