NAT: Consumer groups say NIBA has no more excuses after broker investigation exposes failures in strata insurance

The Australian Consumers Insurance Lobby (ACIL), Owners Corporation Network (OCN) and Unit Owners Association of Queensland have welcomed the Insurance Brokers Code Compliance Committee’s investigation into broker and strata manager arrangements, saying the report confirms concerns consumer groups have been raising with the National Insurance Brokers Association (NIBA) for years. The IBCCC report is attached.

Tyrone Shandiman, Chairperson of the Australian Consumers Insurance Lobby, said the report should be a wake-up call for NIBA.

“The IBCCC deserves credit. They’ve done exactly what an independent compliance body should do. They’ve investigated, they’ve made findings and they’ve referred serious matters to ASIC.”

“We first wrote to NIBA in March 2023 raising concerns about commissions, conflicts of interest and transparency in strata insurance. We were told the 2022 Code of Practice was sufficient. In 2024 we raised further concerns about weaknesses in the Code. We were told to wait for the next Code review.”

“When NIBA released its response to the Code review earlier this year, we said it had completely missed the mark on strata insurance. Today, the IBCCC has identified exactly the types of failures we warned about, demonstrating why NIBA’s decision not to strengthen the Code is such a missed opportunity.”

The three organisations said they were also concerned that the investigation may have identified practices that fall outside the scope of the current Code but nevertheless fail community expectations.

The organisations said the review should not stop with the seven brokers examined and called on the IBCCC to expand its work across a broader cross-section of the industry, particularly smaller brokerages, where governance frameworks may be less mature. They said a number of concerns raised with the consumer groups over recent years have involved smaller operators, making it important that any future review assesses whether appropriate standards are being applied consistently across the industry.

David Glover, Managing Director of Owners Corporation Network, said:

“Apartment owners deserve absolute confidence that insurance recommendations are made solely in their interests, not influenced by commercial relationships. This report reinforces why stronger safeguards are needed.”

“Industry bodies need to understand that failing to address systemic issues doesn’t protect their members. It breeds mistrust in their customers and invites regulatory intervention. We’ve already seen that play out in the New South Wales strata management industry, where years of industry inaction and tolerance of bad practices has tarnished the professionals in the industry and led to significant regulatory reform. That should serve as a warning to every self-regulated profession.”

Mike Murray, President of Unit Owners Association of Queensland, said:

“Queensland unit owners have been raising these concerns for years. This report shows those concerns were justified. Now it’s time for meaningful reform rather than more delay.”

“What concerns did the IBCCC identify that fall outside the current Code but still fail the pub test? That’s what worries us most. We hope the Committee provides NIBA with broader observations because the Code shouldn’t simply reflect legal compliance. It should reflect the professional standards Australians expect including recognition of the ACL contravention of ‘misleading by omission’. With regard to insurance and other hidden commissions, unit owners don’t know what they don’t know – or are never told.”