Australia’s financial complaints authority has placed the insurance broking sector on formal notice: expand remuneration disclosure to all individual and small business clients or face government legislation. The warning, published in the Australian Financial Complaints Authority’s (AFCA) submission to the National Insurance Brokers Association’s (NIBA) code consultation in August 2026, arrives as AFCA recorded its highest-ever annual complaint volume and as breach data within the broking sector continues to rise.
Australians lodged a record 119,949 complaints with AFCA in 2025-26, the highest number on record and the third consecutive year complaints exceeded 100,000. General insurance accounted for 36,022 of those complaints, with motor vehicle insurance ranking among the three most complained-about products nationally. AFCA chief customer officer Deborah Jenkins said the figures “highlight the impact that ongoing cost-of-living challenges and economic uncertainty are having on consumers and the flow-on effects these conditions can have across the financial system.” That systemic pressure is the backdrop against which AFCA published its August 2026 submission on the draft 2027 Insurance Brokers Code of Practice. For brokers, it is the sharpest document AFCA has directed at their sector in recent memory.
AFCA’s submission states directly: “AFCA believes this is the Industry's final chance to do the right thing on disclosure. If it fails to do so, then there is a compelling case for the government to intervene.” The dispute centres on clause 7.1(a)(i) of the draft code, which limits remuneration disclosure to a narrow category of small business clients defined under the Corporations Act 2001, further confined to retail products. AFCA argues this falls well short of Recommendation 3 of the 2025 independent review of the code, which called for disclosure to all individual and small business clients regardless of product type. The history sharpens AFCA’s position. NIBA committed in 2022 to extend disclosure to all individual and small business clients, then narrowed that commitment to retail clients under the Corporations Act definition. AFCA characterises that reversal as an undelivered public undertaking – now in its fourth year unresolved.
The compliance record provides the evidentiary foundation for AFCA’s position. Remuneration disclosure breaches reported to the Insurance Brokers Code Compliance Committee (IBCCC) jumped from 42 in 2023 to 334 in 2024, a rise the IBCCC linked to greater awareness ahead of new informed consent rules that took effect on July 10, 2025. IBCCC’s 2025 Annual Data Report, released June 16, 2026, documented 5,417 code breaches across the year affecting 14,842 clients, with complaints rising to 3,133 – increases in both measures in the same reporting period.
A detection gap compounds those numbers. Of the six brokers that declared zero breaches in 2024, five subsequently recorded breaches in their 2025 submissions, suggesting weaknesses in internal detection rather than clean compliance records. IBCCC chair Oscar Shub has said brokers “should have systems that actively identify issues, including minor process failures, delayed communications, and incomplete documentation.” A targeted IBCCC strata review found none of the seven brokers examined was consistently implementing the code’s safeguards, with nine breach determinations issued and two brokers referred to the Australian Securities and Investments Commission (ASIC) for consideration of non-compliance with conflict-management requirements.
NIBA has defended the draft code’s approach by pointing to client satisfaction research and the sector’s relatively low share of AFCA’s total complaints. CEO Richard Klipin said the 2024 annual data report “highlights the seriousness with which brokers take their compliance responsibilities … and their commitment to putting their clients’ interests ahead of their own.” NIBA has said it supports extending remuneration disclosure to all retail clients – including small business retail clients – provided there is a “reasonable adjustment period” for implementation. On contractual enforceability, NIBA has rejected the proposal, arguing that it fails to recognise the distinction between product manufacturer codes and professional advice codes. NIBA points to existing AFSL obligations, terms of engagement, client service agreements, access to AFCA, and common law duties as mechanisms already governing the broker-client relationship.
The debate has moved beyond the formal submission process. Consumer groups including the Australian Consumers Insurance Lobby (ACIL), the Owners Corporation Network (OCN), and the Unit Owners Association of Queensland (UOAQ) announced on July 16, 2026, that they would no longer engage with NIBA’s consultation process, redirecting their efforts to ASIC and the government directly.
The regulatory environment is moving in the same direction. ASIC named insurance complaints and claims handling as a new enforcement priority for 2026 in November 2025, with deputy chair Sarah Court noting the regulator had “doubled the number of new investigations and nearly doubled the number of new matters filed in court” over the prior 12 months.
The final code is expected to be settled later in 2026. Whether the industry’s response to AFCA’s submission produces a materially expanded disclosure obligation – or whether that outcome arrives through legislation – will shape the operating environment for every subscribing broker in Australia.
