Consumer advocates are calling on the National Insurance Brokers Association (NIBA) to use its current review of the Insurance Brokers Code of Practice to explicitly prohibit conflicted remuneration arrangements in strata insurance, warning they will approach regulators if the issue is not resolved. The Australian Consumers Insurance Lobby (ACIL), the Owners Corporation Network of Australia (OCN), and the Unit Owners Association of Queensland (UOAQ) have told NIBA that the revised code should address situations where brokers pay or share financial benefits with parties who owe fiduciary duties to strata owners, including strata managers. The groups’ position has been raised in the context of NIBA’s consultation on proposed code changes, which opened on Feb. 16, 2026, and runs until April 2, 2026.
The three organisations argue that some strata insurance distribution and remuneration structures sit uneasily with fiduciary obligations owed to unit owners and with financial services licensee duties under Australian Securities and Investments Commission (ASIC) Regulatory Guide 181. ACIL chairperson Tyrone Shandiman said payment flows to fiduciaries involved in placing strata cover should not be treated as conflicts that can be managed through typical controls. “This is a simple issue. If it is unlawful for a fiduciary to receive a financial benefit because it conflicts with their duty to the client, then brokers should not be participating in or facilitating that conduct. That is not a grey area – it is an unmanageable conflict of interest,” Shandiman said.
Regulatory Guide 181 requires financial services licensees to avoid conflicts of interest that cannot be managed effectively. The three groups contend that where a broker’s remuneration model involves paying a fiduciary in connection with strata placement, the conflict falls into that category and should be prohibited rather than addressed through disclosure or consent. OCN joint managing director David Glover said it is not sufficient to rely on disclosure frameworks where the underlying arrangement depends on conduct that would otherwise breach fiduciary duty. “You cannot ‘manage’ or ‘disclose’ your way out of a conflict that depends on breaching fiduciary duty. Where these arrangements exist, the only appropriate response is to prohibit them. Consumers should not have to try to work within structures that are fundamentally inconsistent with their interests,” Glover said.
The consumer groups say the handling of strata remuneration within the code review will indicate how the broking profession approaches self-regulation in practice. They note that strata insurance practices have been the subject of sustained media and stakeholder attention in recent years. UOAQ president Mike Murray said the issues have already been examined through multiple processes and should now be dealt with through professional standards. “There has been extensive scrutiny of strata insurance practices, and the issues are well understood. For the industry to fail to address them through its own code would be a significant missed opportunity and would further erode consumer confidence,” Murray said.
The organisations have stated that, if NIBA’s final code settings do not include clear restrictions on payments to fiduciaries, they will seek ASIC’s involvement. “If NIBA does not act, we will take this issue to ASIC and seek clarification and amendment to Regulatory Guide 181 to ensure these practices are explicitly addressed. There is sufficient evidence and legal foundation for regulators to intervene if required,” Shandiman said.
The intervention from consumer groups is occurring alongside NIBA’s “Your Voice, Your Code” engagement campaign, which is collecting feedback on how to implement recommendations from the recent independent review of the Code. The Insurance Brokers Code of Practice applies to all NIBA member firms and their staff. It sets expectations on matters including conflicts management, support for clients experiencing vulnerability, and how brokers explain their services and remuneration. Compliance is monitored by the Insurance Brokers Code Compliance Committee.
An independent review of the code, led by Phil Khoury of cameron. ralph. khoury and completed in December 2025, produced 14 recommendations to update and strengthen the framework. NIBA released its formal response on Jan. 21, 2026, outlining which recommendations it accepts, where it is proposing different approaches and its reasons. NIBA chief executive Richard Klipin has presented the current consultation as a way for brokers to influence how those recommendations are drafted into code provisions. “The code is how our profession collectively demonstrates its ongoing commitment to self-regulation,” Klipin said.
Consultation is open from Feb. 16 to April 2, 2026, with submissions due by 5pm AEDT on April 2. NIBA is taking feedback via an online form, email submissions, online member workshops scheduled for March, and a webinar on Wednesday, Feb. 25, 2026, titled “From Review to Reality: Delivering a Future-Ready Code.” The “Your Voice, Your Code” campaign seeks input from brokers at different career stages and from a range of broking business models operating under the code.
NIBA president Nick Cook has described the revised code as a signal to external stakeholders about how brokers approach their role. “A future-ready code is one of the clearest signals of consumer trust and confidence in our profession. It demonstrates to key stakeholders across government, regulators, and the wider community that brokers are strongly committed towards professionalism, accountability, and putting clients first,” Cook said.
External stakeholders, including consumer organisations, industry bodies, regulators, and government agencies, have also been invited to provide submissions via email. Code Review Committee chair Di Phelan said their ongoing participation is expected to help align the code with broader expectations. “I acknowledge the valuable contributions made by our stakeholders through the Independent Review process, which have provided an important foundation and have paved the way forward. Stakeholder input in invaluable as their perspectives will help ensure the code continues to reflect community expectations, responds to a changing environment, and reinforces the trust that underpins the broker-client relationship,” Phelan said. As the consultation period continues, the way NIBA addresses the concerns raised about strata-related payments, alongside implementation of the broader review recommendations, is likely to be closely watched by insurance professionals following developments in the code.
