Insurance Brokers Code Watchdog Finds Breaches at All Seven Firms in Strata Review
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All seven insurance broker firms examined in a targeted review of strata insurance arrangements were found to have breached the Insurance Brokers Code of Practice, the Insurance Brokers Code Compliance Committee (IBCCC) said in a report released this week.
What happened
The IBCCC issued nine formal breach determinations across the seven brokerages reviewed, with five firms receiving one determination each and two firms receiving two apiece, according to the report, titled “Strengthening transparency and trust in broker-agent arrangements.” Two of the brokerages have been referred to the Australian Securities and Investments Commission (ASIC) over potential non-compliance with conflict-management requirements under the Corporations Act 2001, and concerns in at least one matter have also been escalated to NSW Fair Trading under the Strata Schemes Management Act 2015.
Why it matters
For brokers operating in the strata space, the findings raise the stakes around how remuneration and ownership structures are disclosed to clients. In one case detailed in the report, a strata management company that wholly owned the broker it placed business through — and shared in its profits — failed to flag that relationship as a conflict at all. Where it was mentioned in client paperwork, it appeared only as a benefit, with no explanation of the risk involved or how the broker intended to manage it. IBCCC chair Veno Kauterau-Shub said that approach falls short of what the Code actually demands: disclosure on its own isn’t sufficient, and brokers must identify a conflict, explain how it could shape the advice given, and show clients how it’s being managed in their best interests before proceeding. A related gap surfaced around remuneration disclosure, where some brokers passed compensation details to strata managers and simply assumed the information made its way to owners corporations, without any process to confirm it had.
Zoom out
The findings land at a sensitive moment for the broking profession. Strata remuneration practices have been under scrutiny since a 2024 ABC Four Corners investigation, and the IBCCC’s own 2025 annual breach data showed renewal failures sitting behind more than 5,400 reported breaches industry-wide. The strata review also lands alongside a broader, separate process already underway: an independent review of the 2022 Insurance Brokers Code of Practice, led by Phil Khoury of Cameron Ralph Khoury, which concluded the profession faces what Khoury described as significant challenges to its reputation and self-regulation. The National Insurance Brokers Association has broadly accepted the direction of that review, including support for extending remuneration disclosure to all individual and small business clients regardless of policy type — a shift that would put small business clients on the same footing as retail clients when it comes to transparency. Taken together, the strata findings and the wider Code review point toward an industry where disclosure-as-formality is being replaced by an expectation of disclosure-as-evidence: brokers will increasingly need to demonstrate, not just assert, that conflicts are being actively managed.
Bottom line
The IBCCC says its intervention already prompted change, with all seven reviewed brokers updating agreements and tightening oversight once issues were raised (one matter remains under investigation). But the Committee has signaled this isn’t a one-off exercise — it now expects every broker, not just those reviewed, to tighten representative agreements, identify structural conflicts, and build verification into their disclosure processes rather than relying on assumption.
With a broader Code review underway and continuing calls for the IBCCC to gain stronger sanction powers, firms that treat this report as a template for compliance, rather than a warning specific to strata, will be the ones positioned well when the next review comes around.The Financial Register is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
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