The independent body that monitors broker code compliance has publicly broken with the National Insurance Brokers Association (NIBA) over the draft 2027 Insurance Brokers Code – and a consumer lobby group has now taken that dispute to a federal minister, putting an existing legislative power to impose a mandatory code on the table.
The Australian Consumers Insurance Lobby (ACIL) met with Assistant Treasurer and Minister for Financial Services Dr Daniel Mulino MP in September, raising concerns about the General Insurance Code of Practice, the independence of industry-led code reviews, and whether voluntary self-regulation is producing adequate consumer outcomes.
Central to the discussion was section 1101AE of the Corporations Act 2001 – a provision introduced following the Hayne Royal Commission that allows the Commonwealth, through regulation, to prescribe a code of conduct and declare it mandatory.
ACIL chairperson Tyrone Shandiman was direct about the implications. “Parliament has already provided government with a backstop. Section 1101AE allows regulations to prescribe a Code of Conduct and declare it mandatory. The legislation is already there,” he said.
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The ministerial meeting did not occur in isolation. The Insurance Brokers Code Compliance Committee (IBCCC) – the independent body whose role is to monitor compliance with the broker code – has publicly stated that NIBA’s draft 2027 Insurance Brokers Code falls short on the issue that has most occupied regulators and parliamentary inquiries: remuneration disclosure.
In a submission to a federal parliamentary inquiry into small business insurance, IBCCC chair Oscar Shub wrote that the draft fails because it does not require brokers to proactively disclose commissions and other benefits to all individual and small business clients.
Under the draft code, disclosure obligations apply only to products classified as retail products under the Corporations Act 2001.
“Many of the insurance products that small businesses commonly need and purchase are not classified as retail products and, as a result, will not be subject to remuneration disclosure requirements,” Shub wrote.
The independent review of the broker code, conducted by cameron.ralph.khoury and led by Phil Khoury, delivered 14 recommendations in December 2025. According to NIBA’s January 2026 media release, the association supported six and rejected or reworked eight – among them making the code contractually enforceable and mandating specific disclosure templates.
The remuneration disclosure issue has a documented history. Actuary and former government reviewer John Trowbridge OAM wrote in a July 2026 submission to NIBA that a 2021 internal code review had recommended broader remuneration disclosure and was rejected by the NIBA board – and that the 2025 external independent review made the same recommendation and was rejected again. “There appears to be no good reason for these limitations beyond broker self-interest,” Trowbridge wrote.
NIBA has maintained that mandatory disclosure templates are too prescriptive for a profession spanning sole practitioners to multinational brokerage groups. The association’s January 2026 media release also cited consumer research showing 87% of client respondents are satisfied with their broker and noted that only 0.8% of Australian Financial Complaints Authority (AFCA) complaints over the 2024/25 financial year involved brokers.
The IBCCC’s 2025 Annual Data Report, released June 16, 2026, documented 5,417 breaches of the Insurance Brokers Code of Practice, affecting 14,842 clients. Complaints also rose in the same reporting period, reaching 3,133.
Remuneration disclosure breaches rose from 42 in 2023 to 334 in 2024. The IBCCC linked the increase to growing industry awareness ahead of informed consent obligations that took effect on July 10, 2025.
A targeted IBCCC strata review found all seven broker firms examined were in breach, resulting in nine formal determinations and two Australian Securities and Investments Commission (ASIC) referrals.
The same report identified a detection gap: of six brokers that declared zero breaches in 2024, five subsequently recorded breaches in their 2025 Annual Compliance Statements.
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According to the Australian Prudential Regulation Authority’s (APRA) intermediated general insurance statistics for the six months to December 2025, total premiums invoiced through intermediaries reached $22.97 billion.
A government-prescribed mandatory code, developed by Treasury in consultation with ASIC and consumer groups, would set conduct standards across that entire distribution channel. Industry would retain a consultative role but would lose the ability to determine which reform recommendations it accepts or rejects.
Shandiman said the situation remains recoverable – but set clear terms. “Our message to the ICA and NIBA is simple: get your Codes right. Industry should have an important role in developing professional standards, but self-regulation cannot simply mean industry deciding which recommendations it is prepared to accept,” he said.
He added: “ACIL’s preference is for industry to get this right itself through genuinely independent processes and stronger consumer protections. But self-regulation has to earn public confidence. Industry should contribute to its Code. It should not control it.”
Under section 1101AE, a mandatory code may prescribe pecuniary penalties of up to 1,000 penalty units for civil penalty provisions. The Commonwealth penalty unit increased to $364 from July 1, 2026, under the Crimes (Amount of a Penalty Unit) Instrument 2026, meaning the statutory maximum that could be prescribed under the provision is currently $364,000.
ACIL said it would continue engaging with government as both the NIBA and ICA code processes progress. NIBA and Minister Mulino’s office were contacted for comment.
