The Insurance Brokers Code Compliance Committee (IBCCC) and the Australian Financial Complaints Authority (AFCA) have both taken the argument over broker remuneration disclosure to a parliamentary inquiry into small business insurance, bypassing the Code review process that is meant to settle it. There is significant disagreement between the National Insurance Brokers Association (NIBA) and these two bodies over how the broker code should deal with fee transparency. The late submissions a week ago to the federal government inquiry have opened a new front in this struggle for the hearts and minds of stakeholders just as the Insurance Brokers Code of Practice (the Code) is in the final stages of a rewrite.
Insurance Business asked the IBCCC what drove this decision, whether it suggested a lack of confidence in the Code review process and what could follow if NIBA does not move.
"The Insurance Brokers Code Compliance Committee refers to its submission to the Parliamentary Inquiry as its stance on the issues regarding insurance and small business," said an IBCCC spokesperson.
NIBA took the same approach with IB. Asked to respond to the fee transparency issues raised by AFCA and the IBCCC, CEO Richard Klipin said NIBA has already submitted to the small business inquiry and that "everyone has a view" on remuneration.
"NIBA's view is contained in the draft Code, media releases and the op eds," said Klipin. "That is the direction of travel in our thinking."
The IBCCC's small business submission said the draft Code falls short because it does not require brokers to proactively inform all individual and small business clients about the commissions and other benefits they receive for arranging their insurance.
Shub said the Code only requires remuneration disclosure for general insurance products classified as retail products under the Corporations Act.
"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," wrote Shub.
The draft Code bears out that reading. Section 7.1 requires disclosure for general insurance products that are retail products under the Corporations Act, to every client who is an Individual or a Small Business, and separately for all strata insurance whether or not the client is a retail client. The Code's own glossary defines a retail product as one of eight kinds: motor vehicle, home building, home contents, sickness and accident, consumer credit, travel, personal and domestic property and medical indemnity insurance.
None of the products at the centre of the parliamentary inquiry appears on that list. A small business buying public liability, professional indemnity, cyber or business interruption cover is not entitled under Section 7.1 to be told what the broker earns.
What the draft provides instead is disclosure on request. Section 7.2 states that any client can ask, whether the client is retail, wholesale, strata or a business of any size, and that the broker must then disclose remuneration for any product arranged or recommended, whatever its type, within a reasonable time and as a dollar amount. That provision reinstates a client-initiated approach from the 2014 Code, which NIBA committed to in January 2026 in place of mandated disclosure templates.
Shub's submission lists the bodies that supported extending remuneration disclosure during the independent review of the Code, among them AFCA, the Australian Small Business and Family Enterprise Ombudsman, the Consumers' Federation of Australia, the Western Australian Small Business Development Corporation, the Australian Consumer Insurance Lobby and the Insurance Council of Australia. It then sets out the consequence.
"The NIBA Board is yet to make its final decision on the Code and therefore still has an opportunity to address this issue through self-regulation," Shub wrote. "However, if broader remuneration disclosure requirements are not included in the final Code, the IBCCC recommends that the Committee consider legislative or regulatory reform to ensure consistent disclosure protections for small business clients."
AFCA's submission to the small business inquiry pointed to what it sees as "significant gaps in the protections available to small businesses purchasing general insurance products, either directly from insurers or via insurance broker intermediaries."
The ombudsman said disclosing how a service provider is paid for services delivered "is a basic feature of the financial services consumer protection framework."
"Despite continuing calls to amend the Code to require remuneration disclosure for all policies, for any product and to any client, NIBA continues to side-step this issue," AFCA wrote.
AFCA said this fee transparency issue goes beyond the content of a single industry code.
"It raises broader questions about the effectiveness of self-regulation where well-identified consumer protection concerns remain unresolved despite repeated review processes and clear recommendations for change," said the ombudsman's submission.
NIBA does not oppose remuneration disclosure in principle and the draft does lift disclosure in two respects. Section 7.1 extends proactive disclosure to every Individual and Small Business client for retail products, rather than to retail clients as narrowly determined. Section 7.4 requires commission and fees to be shown at quotation stage as a percentage, a dollar amount or both, separately for each insurer where more than one quotation is given, and as a dollar amount at invoice stage.
Klipin's latest column for IB explains NIBA's thinking. It does not mention remuneration disclosure but it describes the test applied to every obligation in the draft Code.
"Every time you add regulatory complexity, someone pays. Usually, it is the client," Klipin said.
That test cut both ways, on his account.
"Every obligation a code adds is an obligation someone administers, documents, trains for and pays for," said Klipin. "We were willing to pay it in several places and we said so. We were not willing to pay it everywhere."
He cited an Insurance Council of Australia (ICA) calculation from late 2025 putting annual compliance costs across the general insurance industry at $2.5 billion to $3.5 billion a year borne by consumers.
The conclusion is where it bears on the Code.
"Where the evidence showed a new standard protects clients, the draft lifts the bar above the law," Klipin wrote. "Where it would have added a duplicate layer that clients ultimately fund, it does not."
That could be the fault line. The IBCCC and AFCA say remuneration disclosure to small business clients is a protection the Code should provide and does not. NIBA says an obligation in its Code should be shown to buy a client something before the client is asked to fund it.
The two propositions do not appear to meet. One is about what a client is entitled to know. The other is about what a client can be asked to pay for.
The small business inquiry is scheduled to report on October 27. NIBA released a draft revised Code for consultation in July and its board is expected to release a final version in the coming months.
