Three Australian consumer groups have welcomed changes to the 2027 Insurance Brokers Code of Practice that strengthen requirements for strata broker appointments and financial disclosures involving strata managers.
The Australian Consumers Insurance Lobby (ACIL), Owners Corporation Network (OCN) and Unit Owners Association of Queensland (UOAQ) said the final code addresses concerns that prompted them to withdraw from the National Insurance Brokers Association’s (NIBA) consultation process in July.
The revised broker code introduces broader requirements covering remuneration disclosure, conflicts of interest and client records. It also requires brokers to take reasonable steps to confirm that an owners corporation has authorised their appointment when engaged through a strata manager.
The requirement addresses concerns about insurance portfolios being transferred between brokers without sufficient involvement from owners corporations.
ACIL chair Tyrone Shandiman questioned whether remuneration arrangements had influenced some broker appointments.
“We have witnessed bulk transfers of strata insurance clients between brokers, where we believe decisions were driven by the remuneration offered to strata managers rather than the interests of the owners corporations. These arrangements can leave consumers disadvantaged, often without meaningful involvement in choosing who represents them. The owners corporation is the client. It is their insurance, their money and their decision about who represents them.”
The code also requires disclosure of commissions, fees, rebates and other benefits passed to strata managers, while prohibiting brokers from acting where conflicts of interest cannot be appropriately managed.
OCN co-managing director David Glover welcomed the additional transparency.
“Owners corporations deserve to know who is being paid, how much they are receiving and whether financial arrangements could influence insurance decisions. These reforms are an important step towards greater accountability,” Glover said.
The changes follow a strata insurance compliance investigation that identified shortcomings in broker relationships with strata representatives.
The Insurance Brokers Code Compliance Committee (IBCCC) examined seven brokerages working with 1,088 representatives and issued nine formal breach determinations. Two brokerages were referred to the Australian Securities and Investments Commission for consideration of potential breaches of statutory conflict-management requirements.
The findings included inadequate representative agreements, failures to verify that remuneration disclosures reached owners corporations and conflicts arising from ownership and profit-sharing arrangements.
The consumer groups had withdrawn from NIBA’s consultation in July, arguing that the proposed code did not adequately address conflicts of interest and commission-sharing practices.
Shandiman said the final version represented a significant change from the earlier proposals.
“When we walked away from the consultation, we were frustrated after years of raising these concerns without seeing sufficient progress. But advocacy must also recognise progress when it happens. NIBA has listened and it deserves credit for the meaningful improvements made to the final Code,” Shandiman said.
However, the groups maintained that further reforms were needed to address complex commercial relationships and situations where parties perform multiple roles in insurance distribution.
“While further reforms are needed, particularly around complex commercial relationships and dual-role conflicts, this is a genuine win for strata consumers and demonstrates the value of persistent consumer advocacy,” Shandiman said.
The new code commences on January 1, 2027, with transitional arrangements applying to certain obligations. NIBA will provide implementation guidance and training to assist subscribers with the changes.
