The Insurance Brokers Code Compliance Committee (IBCCC) has reviewed seven brokers that collectively work with more than 1,000 representatives across strata management, including three large brokerages each employing more than 100 full-time staff. None, it found, was consistently meeting the safeguards demanded in their own Insurance Brokers Code of Practice (the Code).
Following the review the Committee issued nine formal breach determinations across all seven brokers. Five brokers received one breach determination each and two brokers received two breach determinations each, according to the report, Strengthening transparency and trust in broker-agent arrangements.
More seriously for the sector, the IBCCC has referred two of the brokerages to the Australian Securities and Investments Commission (ASIC) for consideration of non-compliance with conflict-management requirements under the Corporations Act 2001 (Cth). It also escalated concerns to NSW Fair Trading for consideration under the Strata Schemes Management Act 2015 (NSW).
The findings land at a sensitive moment for the broking profession, which has been under scrutiny over strata remuneration since a 2024 ABC Four Corners investigation. They also follow the IBCCC's 2025 annual breach data showing renewal failures at the centre of more than 5,400 reported breaches.
IBCCC chair Oscar Shub (pictured), suggested the central failing was structural: brokers treating the handover of work to a representative as the end of their obligations. The Code makes brokers responsible for the conduct of anyone acting on their behalf, yet the review found that all seven had representative agreements that fell short of section 8.2(a)(iv) - none explicitly required representatives to comply with the Code, report breaches within five days, or immediately report Code-related complaints.
Instead, brokers leaned on broad clauses requiring compliance with "relevant law." As Shub put it, that is not enough, because the Code is not legislation and a general reference cannot tell a representative what to actually do.
The consequence, he argued, is a chain of responsibility that breaks at exactly the point it should hold. "Accountability cannot stop at the point where the broker hands work to a representative," Shub said. Without specific, enforceable obligations, brokers cannot monitor conduct, escalate problems early, or hold representatives to account – the very functions the agreements are meant to perform.
The review's second strand exposed how easily a box-ticking approach to conflicts and remuneration can leave clients exposed. In one case, a strata management company wholly owned the broker it placed business through and shared in its profits - a clear conflict the broker had not recognised as one. The arrangement was disclosed in client documents, but only as a benefit, with no explanation of the risk or how it would be managed.
That, Shub said, misunderstands what the Code requires. "Disclosure alone is not enough," he said – brokers must identify a conflict, explain how it may shape the advice or service and demonstrate how it is being managed in the client's best interests before continuing to act.
The same gap appeared in remuneration. Some brokers handed disclosure information to strata managers and assumed it reached the owners corporation, with no mechanism to verify it had. The Committee was blunt that the client in strata insurance is always the owners corporation – never the strata manager – and that an unverified disclosure cannot prove a broker has met its commitments.
The IBCCC said its intervention had already driven change, with all seven brokers updating agreements and strengthening oversight once issues were raised and one matter still under investigation. It now expects every broker - not just those reviewed - to tighten representative agreements, identify and manage structural conflicts and build assurance into disclosure rather than relying on assumption.
A broader review of the broking Code is under way and there are continuing calls for the IBCCC to be granted tougher sanction powers. Where future reviews find similar failings, the Committee said, a broker's response to this report will count against them.
