ACCC Strengthens Position Against Broker Commissions
ACCC Strengthens Position Against Broker Commissions
The issue stems from the practice where broker commissions are often based on premium amounts, potentially discouraging brokers from pursuing more cost-effective coverage or options that pay lower or no commissions for clients. Despite full disclosure of such remuneration to consumers, the ACCC argues that the inherent conflict remains problematic.
ACCC Chair Gina Cass-Gottlieb, in the submission, underlined that while some consumers might resist an upfront fee akin to commissions, the transition challenges away from conflicted remuneration models do not justify retaining exemptions permitting them. This echoes a broader reform ethos initiated by the federal government in 2023, stipulating that brokers must secure client consent to receive commissions when providing personal advice.
NSW Fair Trading, in its independent review of strata sector practices, has also highlighted the need for the broking code of practice to enhance commission practices. Commissioner Natasha Mann advocates for bolstered disclosure obligations, promoting transparency in brokers' remuneration and ownership structures, coupled with robust compliance monitoring mechanisms.
Further perspectives include those from consultant John Trowbridge, who supports the continuation of commissions but emphasizes the necessity for brokers to transparently disclose all commission-related earnings. Trowbridge also suggests that the National Insurance Brokers Association offer guidelines to elucidate conflict management and fiduciary responsibilities within the industry.
The WA Small Business Development Corporation has expressed support for widening the disclosure requirements scope, advocating for the inclusion of small businesses. By aligning with the Australian Financial Complaints Authority rules, small enterprises, often with limited resources, stand to benefit from an expanded definition that enhances clarity on financial incentives influencing broker services.
The industry awaits further developments from the review, led by Phil Khoury, as its submission deadline approaches.
Published:Friday, 2nd May 2025
Source: Paige Estritori
Share this news item:
| Ombudsman's Decision Favors Claimants in Solar System Dispute 23 May 2025: Paige Estritori Homeowners grappling with damaged solar power systems are set to have a substantial portion of their repair costs reimbursed. This follows a significant ruling where an ombudsman overruled the insurer IAG's application of an electronic malfunction exclusion in the claim process. - read more |
| AFCA Upholds Pause on QBE Claim but Dismisses Fraud Allegation 21 May 2025: Paige Estritori The Australian Financial Complaints Authority (AFCA) has ruled on a dispute involving insurer QBE and a vehicle damage claim. While QBE has been permitted to halt the processing of the claim until the policyholder, a company director, provides additional information, the fraud allegations levied against the claimant remain unsubstantiated. - read more |
| AFCA Upholds Policyholder's Claim, Dismisses Fraud Allegation in Car Theft Case 19 May 2025: Paige Estritori The Australian Financial Complaints Authority (AFCA) has dismissed allegations of fraud against a policyholder by Auto & General Services following an unsatisfactory investigation related to a stolen and burnt-out vehicle. The ruling in favour of the claimant highlights procedural gaps in the insurer’s investigation. - read more |
| Asgard Announces Significant Hike in Insurance Premiums 16 May 2025: Paige Estritori Asgard, the investment platform owned by Westpac, has announced substantial increases in insurance premium rates, ranging from 0.7% to 94.6%. This decision comes in collaboration with AIA Australia following a review of its insurance offerings. The changes, which will affect clients with Asgard Personal Protection Packages, are attributed to rising costs, including claims expenses. - read more |
| Why life insurance is a necessity in tough times With household budgets under pressure ... and consumer confidence weak, many families are wondering whether life insurance is worth the expense. Or maybe it is something they can do without? - read more
|
| Understanding Income Protection Insurance: A Beginner's Guide for Australians Welcome to the essential guide on Income Protection Insurance for Australians. Whether you're just starting out in the workforce or you're well into your career, understanding how to protect your income is crucial. In this beginner-friendly article, we'll explore what income protection insurance is, why it's a vital safeguard for workers, and dive into some real-life scenarios illustrating its importance. - read more
|
| Health Insurance for Young Australians: Why Starting Early Pays Off Health insurance is a crucial aspect of managing both health and financial risks. Many Australians may not realize the significance of having robust health coverage until they face unexpected medical expenses. Starting early with health insurance can not only provide peace of mind but also pave the way for better health management in the long run. - read more
|
| Income Protection Insurance vs. Total Permanent Disability: What’s the Difference? When life throws unexpected challenges your way, being financially prepared can make all the difference. This is where Income Protection Insurance and Total Permanent Disability (TPD) Insurance come into play. These two types of insurance provide a crucial safety net, ensuring that you and your family remain financially stable even when you're unable to work due to illness or injury. - read more
|
A formal request made by the policyholder to the insurance company for payment of a loss covered by the insurance policy.