How is the Insurance Industry Regulated

All insurance brokerages in Australia have an Australian Financial Services (AFS) licence and must meet the conduct standards within the Financial Services Reform Act (part of the Corporations Act).

The Australian Securities and Investments Commission (ASIC) is the industry regulator that monitors the conduct of the licensees. Brokers must also subscribe to and be bound by the decisions of the Financial Ombudsman Service (FOS) a service designed to resolve complaints and problems between clients and their brokers.

Reputable and experienced insurance brokers in Australia will generally also hold additional qualifications such as a certificate or diploma in financial services.

In 2006 the National Insurance Brokers Association (NIBA) introduced the Insurance Brokers Code of Practice (Code) as part of a national self-regulatory scheme which is intended to promote good relations between insurance brokers, policyholders and others in the insurance industry, as well as efficiency in transactions by laying out standards of good practice and levels of service that are expected of brokers.

Members of the National Insurance Brokers Association of Australia (NIBA) are bound by the terms of the Code. Other parties or entities can also adopt the Code by entering into a Deed of Adoption with NIBA.

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