The General Insurance Code of Practice (GI Code) applies to all insurers who have adopted it. In addition, the GI Code applies to the insurer’s Employees, Distributors, Service Suppliers, External Experts and authorised repairers. Practically, this includes Underwriting Agencies and any broker acting under a Binder, TPAs, Investigators, Loss Assessors or Loss Adjusters , Collection Agent, and home and motor vehicle repairers.
Lloyd’s has adopted the Code subject to the condition that it only applies to policies issued by an Australian Coverholder under a binding authority agreement and claims managed in Australia.
The Insurance Brokers Code of Practice (Brokers Code) applies to all NIBA members. In addition, the Brokers Code applies to the NIBA members (brokers) employees, agents and representatives (including authorised representatives).
Both Codes are currently undergoing review.
The role of Codes
With the numerous and substantial changes to general insurance financial service laws since 2021 and upcoming release of the revised 2026 GI Code and Brokers Code it is useful to explore the role of Codes, and how they operate with general insurance financial service laws.
ASIC’s view on the role of Industry Codes
ASIC considers a code to be essentially a set of enforceable rules for the conduct of code subscribers. Codes should therefore improve consumer confidence in a particular industry or industries. (RG 183.2)
ASIC believe that the primary role of a financial services code is to raise industry standards and deliver substantial consumer benefits. (RG 183.3)
ASIC expects an effective code to do at least one, and preferably more than one, of the following (RG 183.4):
(a) address specific industry issues and consumer problems not covered by legislation;
(b) elaborate on legislation to deliver additional benefits to consumers; and/or
(c) clarify what needs to be done from the perspective of a particular industry, practice or product to comply with legislation.
What do the Codes say about operating with financial service laws?
The Code and the law
The current GI Code covers this in paragraphs 18-20 (my emphasis):
The Code is designed to work with the many laws that cover our conduct and to deal with issues not dealt with in legislation. The Code does not limit your rights under law against us.
Where there is an obligation under the Code in addition to a legal requirement, we will also comply with the Code, unless doing so would be in breach of the law.
If there is any conflict or inconsistency between the Code and any Commonwealth, State or Territory law, then that law prevails.
Draft 2026 GI Code
Under the draft 2026 Code the material changes to the 2026 Code compared to the current are:
- the 2026 Code acknowledges that sometimes specific Code requirements are a higher standard than required of us by the law. (para 19); and
- obligations of the law or regulatory requirements are not incorporated into your policy and the law or regulatory requirement will prevail to the extent of any conflict or inconsistency. (para 20)
Brokers Code
The Code is designed to work with the laws that cover Code Subscriber conduct and go beyond standards required at law. The Code does not and is not intended to limit a client’s rights at law (Section 3.2(b)(v))
The review of the Brokers Code did not provide any recommendations in respect of Section 3.2(b)(v) however, recommended The Code should oblige signatories to include a standard clause in their client contracts that states that the provisions of the Code form a part of the contract with the client
NIBA had concerns with this recommendation
This recommendation reflects a fundamental distinction between product manufacturer codes and professional codes for advice providers. Insurers that manufacture products have a direct contract with customers—their Code can form part of that contract and help shorten it through standardised, uniform incorporation by reference. Brokers are professionals who advise on othersʼ products; our Code sets professional standards, not contract terms.
No professional advice code in Australia—including those of the Financial Advice Association of Australia, the Mortgage & Finance Association, or professional accounting bodies—is contractually enforceable by clients. This is a deliberate and appropriate distinction. AFSL obligations, Terms of Engagement, client service agreements, and access to AFCA already govern the broker-client relationship, along with common law duties. Furthermore, the Code is monitored and enforced by the independent IBCCC, rather than by the courts. Adding a further layer of contractual enforcement could increase costs passed to clients without commensurate benefit
The Purpose of Codes
It is clear from the above that the primary purpose of an Industry Code is:
- to provide Standards that are higher than what is required by law; and
- where there is conflict or inconsistency the law will prevail.
What does in conflict or inconsistent mean?
A conflict can simply mean that two things cannot happen at the same time or cannot exist together.
In law and legislation, inconsistency refers to a situation where two or more legal provisions conflict or cannot sensibly coexist. It’s likely that inconsistency between the law and a clause in a Code would be approached in a similar manner.
Courts resolve these conflicts through statutory interpretation by assessing whether the conflict is direct or indirect.
Purpose (indirect inconsistency): ‘Cover the field test’. the question is whether the law shows an intention to be a “complete statement” of the law on the topic. Is the intention of the paramount legislature to express the law “completely, exhaustively, or exclusively” (refer Heli-Aust Pty Limited v Cahill [2011] FCAFC 62)
Outcome (direct inconsistency): direct inconsistency includes the obvious “impossible to obey both” scenario (one requires X, the other forbids X). But it also extends to cases where obedience to both is possible, yet the [Code] would “alter, impair or detract from” the operation of the law—i.e. the practical effect/outcome is that the law is qualified or undermined (refer Telstra v Worthing / Victoria v Commonwealth)
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