Compliance chair wants brokers to report complaints
Compliance chair wants brokers to report complaints | Insurance Business Australia
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Compliance chair wants brokers to report complaints
“The numbers are worrying”
In October, the Insurance Brokers Code Compliance Committee (IBCCC) released its 2022 Annual Data Report. The report is a tally and analysis of the number of complaints and breaches reported by brokers who are subscribed to the voluntary Insurance Brokers Code of Practice. The “subscribers” number more than 400 brokerages with almost 2,000 branches.
Since 2015, the IBCCC has called attention to the high number of brokerages that continue to report no breaches or complaints. This year was no different. Almost half of the brokerages reported no breaches or complaints.
The chair of the IBCCC, Oscar Shub, expressed concern – again – over these findings.
Exasperated with brokers?
Insurance Business asked Shub if his compliance committee is getting exasperated with brokers.
“We’re not really exasperated but clearly, we want improvements,” said Shub, who is also a consultant with law firm Clyde & Co. “I’ll tell you where the problem arises with breaches and complaints: You have to convince the brokers that it’s not detrimental to them, or the image or their brand, to report breaches or complaints.”
Shub, who has worked in insurance all his life, said the industry’s problem is not unique. He has experienced the same reluctance from law firms he has worked with.
IB asked if the IBCCC sees this lack of reporting as a cultural problem.
“Yes, I think it’s a cultural thing,” Shub said.
An education process
He said there’s also a lack of reporting of resolved issues.
“If you see a breach, or you get a complaint and you resolve it immediately, that is still something you should report, because we want the information,” he said. “We’re pleased that you’ve resolved the issue but we want the information so that we can use it for training.”
He said the IBCCC is involved in an “education process” about breach reporting and is engaging with influential, senior members of firms “to get that message across.”
“We’re also making the point that we doubt that those who say they’ve never had a complaint or a breach could be right , we just want to know about it,” said Shub. “We’re all human beings, we make mistakes, and that’s the message that we’re conveying.”
He said if brokers have a question on their minds about something on their files that could be wrong, they should just go ahead and report it.
“It’s not going to damage them, it’s not going to do them any harm, it’s going to at least get dealt with,” he said.
Shub said it’s important for people to know what and how errors occur.
“That’s our main aim: to get the data so we can use that information for training purposes and advise brokers what they should be looking out for to avoid similar things happening in their organisation,” he said.
The industry’s reporting culture is changing
Despite several years of Data Reports with the same issue, Shub is confident that brokers’ non-reporting culture is changing.
“I think we’ve got ourselves into a good position where we have an industry collective and we’re working effectively in improving the reporting,” he said. “We’re making it easier for brokerages to report as well because we did have some feedback that they found the forms difficult to work with.”
He said the IBCCC has seen improvements.
“Sometimes it wanes a little but we’re working at it and I think we’ll get a good response over a period of time,” Shub said. “We’re not there to embarrass anybody – we’re there to ensure that people are mindful of how they can avoid mistakes.”
Most complaints about “arranging insurance”
According to the Data Report, just over half of the 400-plus subscribers who reported breaches, more than 40% were about “arranging insurance” and almost 30% concerned claims management.
The total of self-reported complaints numbered more than 2,200. The number of breaches reported by brokerages was nearly 3,500.
AFCA complaints about insurers
Another organisation that tracks complaints is the Australian Financial Complaints Authority (AFCA).
During the 12 months up to June 2023, AFCA progressed almost 16,000 complaints from consumers about general insurance products to the “case management stage.” Most of those complaints, according to its Data Hub, concerned home or motor insurance.
Are you a broker? Do you report your breaches and complaints to the IBCCC? Please tell us why or why not, below
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