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PROGRESS OF THE CODE REVIEW

The Independent Reviewer of the Insurance Brokers Code of Practice, Marigold Magnaye, has provided an update into the progress of the Code review.

In February 2021, the Discussion Paper seeking submissions on the NIBA Code of Practice Review was released. It was a longawaited release, with the benefit of having significant key stakeholder input and was informed by the findings from the Hayne Royal Commission, regulatory responses, and the results of other key Codes of Practice in the financial services industry.

Significantly, the Discussion Paper included input from NIBA in the form of a draft proposed amended Code of Practice. The release of this document has offered valuable transparency to key stakeholders and other interested parties on NIBA’s thinking which has allowed submissions to address and identify key areas where progress can be made.

Magnaye said, “Ten submissions were received in total from brokers, other industry or representative bodies, the Consumer Federation of Australia (CFA), and the Insurance Brokers Code Compliance Committee (IBCCC). It is clear there is great interest in the NIBA Code of Practice across the board, and a belief that industry codes have an important role to play in establishing good practices, values, and a culture that a profession seeks to reflect.”

Submission suggestions relating to implementation of the revised Code of Practice and how brokers and customers can be supported in this process have been welcomed. The practical implementation of a Code and successfully embedding it in an industry remains the benchmark for an effective “living Code”.

She added, “The most detailed submissions were provided by the CFA and the IBCCC, and the message is clear that more is expected of the revised Code of Practice in order to meet consumer expectations. NIBA’s directors are taking on board these submissions and I am working with CEO Dallas Booth and the Association’s board to consider their feedback and NIBA membership buy-in on the key issues arising and how a revised Code fits within the strategic plans for the profession.”

Magnaye also clarified the next phase of the Code of Practice Review will be an iterative process, keeping lines of communication open between NIBA and key stakeholders on the key issues, “I am grateful for the ongoing assistance offered by the NIBA Board, the CFA, and the IBCCC to progress the review.

“The Code Review remains on track, with the intent being to close expectation gaps through focused consultation in the coming months. These next few months will be critical in determining the timing and content of the revised Code,” she concluded.

BUDGET 2021-22 OVERVIEW FOR INSURANCE BROKERS

The federal budget for 2021-22 delivered by the treasurer Josh Frydenberg has addressed many of the concerns being faced by small businesses.

The National Insurance Brokers Association (NIBA), CEO, Dallas Booth welcomed the budget and said, “Measures including tax cuts for small businesses, incentives to invest in your business, significant support for regional areas, targeted industry packages and more will not only help insurance clients but also broking businesses.”

He added that what insurance brokers do is more than just procure policies, they are trusted advisers for business owners. “There is continued support for many sectors, regions and communities that face significant challenges and brokers need to tell clients about every bit of help available.”

This budget also implements measures announced by the Government in its response to the recommendations of the Royal Commission into National Natural Disaster Arrangements.

On the disaster mitigation funding announcement, Andrew Hall, Insurance Council of Australia CEO said, “Insurers look forward to working with the Government and other stakeholders on the design and implementation of the cyclone reinsurance pool ahead of its implementation mid-2022.”

Booth added, “We at NIBA fully support these measures and look forward to working with the ICA to ensure that all Australians have access to insurance cover that is affordable.”

You can read more about the support available to business on the government’s website at budget.gov.au/2021-22/ content/download/glossy_jobs.pdf, or scan the QR code above.

For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/

MCDOUGALL REVIEW INTO ICARE HANDED DOWN

The recommendations of the fast-tracked Insurance and Care NSW (icare) and State Insurance and Care Governance Act 2015 Independent Review have been handed down by retired Supreme Court Judge Robert McDougall.

The review offers an independent assessment of the issues and challenges facing icare and the workers’ compensation scheme and McDougall examined issues raised over the past year.

The review states icare’s push for change was well-intentioned but was conducted too quickly which led to poor execution and failures in areas including procurement, cost management, probity and conflicts management. It concludes that, once all relevant recommendations have been implemented, “… the result should be a workers’ compensation system in this State that delivers fairly to injured workers the full measure of their statutory entitlements, and does so efficiently and at the least cost possible to employers.”

Treasurer Dominic Perrottet said McDougall’s objective and constructive approach would enable the government to focus on implementing the review’s recommendations, delivering a stronger and better workers’ compensation scheme.

“We know there is still more work to be done and these recommendations will form the bedrock of a better and stronger worker’s compensation scheme.”

Key recommendations from the Review include: • icare should be bound to a procurement and probity framework equal to that of other government agencies; • icare prepare and publish a plan for cultural change which addresses key risk factors, and reports annually to the Treasurer on its progress; • The icare Board include one or more members who possess extensive public sector experience and workers’ compensation insurance experience; • SIRA develop an accelerated plan for implementation of the findings of its Healthcare

Review and release it publicly; • There should be a further independent cultural review of icare by 2023.

Minister for Digital and Minister for Customer Service Victor Dominello welcomed the review and said work would start immediately on the recommended changes.

“The State Insurance Regulatory Authority (SIRA) is committed to working with icare and the industry to drive down costs and deliver better health outcomes for injured workers,” Dominello said.

You can access a full copy of the review on the government’s website: nsw.gov.au/sites/default/files/2021-04/ Independent-Review-Report.pdf, or scan the QR code.

REINSURANCE POOL TO COVER CYCLONE AND RELATED FLOOD DAMAGE IN NORTHERN AUSTRALIA

A$10 billion reinsurance clients at affordable rates. The market pool to underwrite cover has been extremely difficult, and the for cyclone and cyclone- underlying causes of these issues delivers fairly to injured workers the full related flood for privately owned were well identified by the ACCC.” homes, strata corporations and measure of their statutory entitlements, Booth added that NIBA looks and does so efficiently and at the least cost small businesses, and a $40 million forward to working with the Federal possible to employers.”investment in making older strata Government, the Insurance Council Treasurer Dominic Perrottet said buildings more resilient to extreme of Australia and the Association’s McDougall’s objective and constructive weather events, will be established members in northern Queensland approach would enable the government to offer northern Australians more and northern Australia more to focus on implementing the review’s affordable and accessible home and broadly to develop and implement business insurance. recommendations, delivering a stronger and this important solution.

The reinsurance pool would better worker’s compensation scheme. The Government is also cover cyclone and related flood “We know there is still more work to announcing a plan to specifically be done and these recommendations will damage in northern Australia from reduce insurance costs for strata form the bedrock of a better and stronger 1 July 2022, and would be backed by properties, by committing $40 worker’s compensation scheme.”a $10 billion government guarantee, million for the North Queensland reducing insurance premiums Key recommendations from the Review Strata Title Resilience Pilot include:across northern Australia by over Program, to start in 2022. · icare should be bound to a procurement $1.5 billion for households, strata Strata properties face some of and probity framework equal to that of other and small businesses over 10 years. the worst insurance affordability government agencies;Prime Minister Scott Morrison pressures in Northern Australia. The said, “We believe in the future of ACCC noted that, in 2018-19, the northern Australia. This means we average strata premium was $6,800 need to take further action to boost in North Queensland, compared the resilience for Australians to live with the Australian average of and work in northern Australia.” only $3,300. Strata residents have

Treasurer Josh Frydenberg few options other than to pay said a Treasury-led Taskforce will this because strata properties are continue work on this to develop required to hold insurance under the final design of the reinsurance Queensland legislation. pool in close consultation with Like Booth the Insurance Council industry, with details to be finalised of Australia (ICA) CEO Andrew Hall following that consultation process. also welcomed the announcement,

“More affordable insurance “Governments at all levels need means peace-of-mind for hundreds to look at other impediments to of thousands of Australians across lower premiums, including the northern Australia, knowing that elimination of State insurance their economic livelihoods are stamp duties and levies, improving protected,” he said. resilience standards in building

The National Insurance Brokers codes and land planning decisions, Association (NIBA) CEO, Dallas and lifting investment in mitigation Booth welcomed this announcement, infrastructure and household “Insurance brokers in northern resilience programs.” Australia have been working very “We look forward to working hard in recent years to obtain with the Government on the appropriate insurance cover for their consultation and design process.”