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.
๐๐ ๐พ๐ค๐๐ ๐ค๐ ๐๐ง๐๐๐ฉ๐๐๐
Part 3 of the GI Code requires insurers & their distributors & claim service suppliers to be ๐ฉ๐ฐ๐ฏ๐ฆ๐ด๐ต, ๐ฆ๐ง๐ง๐ช๐ค๐ช๐ฆ๐ฏ๐ต, ๐ง๐ข๐ช๐ณ, ๐ต๐ณ๐ข๐ฏ๐ด๐ฑ๐ข๐ณ๐ฆ๐ฏ๐ต & ๐ต๐ช๐ฎ๐ฆ๐ญ๐บ ๐ช๐ฏ ๐ฅ๐ฆ๐ข๐ญ๐ช๐ฏ๐จ๐ด ๐ธ๐ช๐ต๐ฉ ๐ค๐ถ๐ด๐ต๐ฐ๐ฎ๐ฆ๐ณ๐ด.
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.
๐๐ฃ๐จ๐ช๐ง๐๐ฃ๐๐ ๐ฝ๐ง๐ค๐ ๐๐ง๐จ ๐พ๐ค๐๐ ๐ค๐ ๐๐ง๐๐๐ฉ๐๐๐
The Brokers Code, requires NIBA members to have ๐ฅ๐ง๐ค๐๐๐จ๐จ๐๐ค๐ฃ๐๐ก ๐๐ค๐ข๐ข๐๐ฉ๐ข๐๐ฃ๐ฉ, ๐๐๐ฉ ๐๐ฉ๐๐๐๐๐ก๐ก๐ฎ & ๐๐ ๐ฉ๐ง๐๐ฃ๐จ๐ฅ๐๐ง๐๐ฃ๐ฉ & ๐๐๐๐ค๐ช๐ฃ๐ฉ๐๐๐ก๐.
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.
๐ผ๐๐๐ ๐๐๐ฃ๐๐ง๐๐ก ๐ค๐๐ก๐๐๐๐ฉ๐๐ค๐ฃ ๐ฉ๐ค ๐ฅ๐ง๐ค๐ซ๐๐๐ ๐๐๐ฃ๐๐ฃ๐๐๐๐ก ๐จ๐๐ง๐ซ๐๐๐๐จ ๐๐๐๐๐๐๐๐ฃ๐ฉ๐ก๐ฎ, ๐๐ค๐ฃ๐๐จ๐ฉ๐ก๐ฎ & ๐๐๐๐ง๐ก๐ฎ
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.
๐๐ค๐ฌ ๐ฉ๐ค ๐๐ข๐ฅ๐ก๐๐ข๐๐ฃ๐ฉ
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 ‘๐ฉ๐ฐ๐ฏ๐ฆ๐ด๐ต, ๐ฆ๐ง๐ง๐ช๐ค๐ช๐ฆ๐ฏ๐ต, ๐ง๐ข๐ช๐ณ, ๐ต๐ณ๐ข๐ฏ๐ด๐ฑ๐ข๐ณ๐ฆ๐ฏ๐ต & ๐ต๐ช๐ฎ๐ฆ๐ญ๐บ’?
It is possible to comply with individual Code paragraphs but still be in breach of the overarching Code obligations.