The Insurance Brokers Code Compliance Committee (IBCCC) has released an Own Motion Inquiry report examining how subscribers to the Insurance Brokers Code of Practice drive good behaviours and encourage a culture of compliance within their organisation.
Following the Culture is Key report, published by the IBCCC in November 2021, the Own Motion Inquiry report is based on subscribers’ responses to a series of questions about company culture that were included as part of the 2021 Annual Compliance Statement questionnaire.
Developed by consultants Behavioural Insights Team (Australia) Pty Ltd and based on the actions identified in Culture is Key, the questionnaire aimed to find out how subscribers drive good behaviour within their organisation.
The inquiry reveals that many insurance brokers have established good processes and procedures to facilitate a culture of compliance and ensure good outcomes for customers.
While the report found positives, it also noted areas in which subscribers could improve:
- Subscribers should incorporate multiple methods for training staff.
- Subscribers should strive to be proactive in their monitoring – avoid the inertia created by assuming everything is fine until there is a significant adverse event.
- Subscribers should continue to look out for systemic breaches, focusing on the five common root causes:
- a process within the business
- an issue with a specific staff member
- a particular product or insurer
- a specific client, and
- an issue that was specific to a particular point in time.
The report highlighted several findings that indicate widespread good practice among insurance brokers:
- 56% of subscribers have a higher internal standard for sending out policy renewal notices than the legal 14-day minimum.
- 66% use regular internal staff training to highlight and learn from past Code breaches.
- 65% conducted an external compliance audit within the past three years to identify any gaps or weaknesses in compliance processes.
- 76% have procedures to identify breaches or potential issues.
- 57% provide clients with information about cancellation and fees in plain English.
- 67% use checklists ensure they provide clients with the necessary information.
- 60% use checklists when onboarding new clients.
The report also includes innovative examples of good practice provided from a wide range of subscribers, demonstrating that all brokers, regardless of their size, can implement processes that improve compliance frameworks.
With the 2022 Code now in effect, the IBCCC encourages all subscribers to review their existing processes and procedures against the good-practice examples and recommendations in the report. They should identify measures they can take to improve their company culture, breach reporting and client outcomes.