How To Monitor Insurance Brokers Code Of Practice

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1 CODE ADMINISTRATOR Insurance Brokers Code of Practice Annual Report February 2014 Reporting Year: PO B O X 14240, M E L B O U R N E C I T Y M A I L C E N T R E, M E L B O U R N E, V I C 8001 EFinancial M A I L : Ombudsman I N F CService O D E C O2013 M P L Ibcop I A N Version C E. 6 O Final R G. A U P H O N E : of

2 Contents Introduction 3 The Insurance Brokers Code of Practice (the Code) 3 How the Code is administered 4 About this report 4 General Manager s report 4 The year at a glance 5 Code administration 6 Principles 6 Functions 7 Secretariat 7 Code monitoring activities 8 Code monitoring framework Overview of results 9 Feedback 10 Category 1 Compliance Self Certification program 10 Category 2 Annual Compliance Statement (ACS) program 12 Self-reported Code compliance breaches 12 Internal Dispute Resolution 17 Investigations 21 Complaints investigations 21 Self-initiated investigations 21 Engaging with industry and stakeholders 21 Introduction to the revised 2014 Insurance Brokers Code of Practice 22 Future outlook 23 Appendix A: Schedule of Code subscribers as at 31 October Appendix B: Comparative table of subscriber self-reported Code breaches 29 Appendix C: Comparative table of Code subscriber self-reported complaints 30 Appendix D: Additional tables complaints and breach data 32 Page 2 of 32

3 Introduction Welcome to our 2013 Annual Report. Here you will find a review of our work in to improve standards of practice and service in the Australian insurance brokering industry, undertaken in collaboration with 429 insurance brokers subscribing to the Insurance Brokers Code of Practice across Australia. Insurance brokers offer individuals and businesses professional advice on the risks associated with the property they own or the business they operate, and negotiate appropriate insurance protection tailored to their needs. In Australia they are significant players in the insurance market, placing around half of the total insurance business every year. 1 A sizeable proportion of the country s insurance brokers are members of the National Insurance Brokers Association (NIBA), the national trade association for licensed life and general insurance brokers. As members of the association, they are obliged to meet the standards of practice set by the Insurance Brokers Code of Practice. The Insurance Brokers Code of Practice (the Code) This Code is an agreement between NIBA and its members (and other brokers who voluntarily subscribe to the Code) which sets out the minimum service standards that consumers can expect from brokers. It also outlines how complaints and disputes regarding potential breaches of the Code can be resolved. The Code aims to build professional competence in the broking profession and increase consumer confidence in insurance brokers and the role they play in the insurance process. The service standards outlined in the Code also aim to safeguard self-regulation of the industry, and play a vital role within the regulatory and consumer protection framework. The Code benefits its subscribers, consumers and the industry as a whole. By complying with the Code, insurance brokers can demonstrate that they take their ethical obligations to consumers and other stakeholders seriously. Consumers and stakeholders, in turn, can be reassured that service standards and protections are in place to ensure that they are treated in an open and honest way. As at 31 October 2013, 429 insurance brokers were subscribers to the Code; 90% (384) were NIBA members. 1 IBISWorld, Insurance Brokerage in Australia: Market Research Report, November 2013 Page 3 of 32

4 How the Code is administered NIBA has appointed the Financial Ombudsman Service to independently administer the Code. We offer specialised services to the financial services industry in external dispute resolution, systemic issues management and Code monitoring. Our Code Compliance and Monitoring Team is committed to contributing to good standards of practice and service by promoting compliance with the Code. By engaging with the industry and its stakeholders through our monitoring, investigating and reporting functions, we aim to influence positive and effective changes in industry behaviour. About this report This annual report honours our reporting obligations under the Code. It reviews our key compliance monitoring activities for and analyses aggregated industry data provided by insurance brokers from around Australia to assess their compliance to the Code s standards. General Manager s report This financial year marked a significant evolution in our monitoring and compliance process, making us more effective in our work with Code subscribers to improve practice in the Australian insurance brokering industry. Subscribers, in turn, actively engaged with their Code in , serving to strengthen the industry s self-regulatory framework. Following extensive consultation with the National Insurance Brokers Association and Code subscribers, we modified our Annual Compliance Statement program this year to better accommodate a diverse membership base of more than 400 broker firms. These firms vary in size from two- to three-person operations to large-scale national enterprises as well as in administrative capacity, making a one size fits all approach problematic. Our new tailored program acknowledges these disparities by better balancing our monitoring requirements with a firm s capacity to respond. I am pleased to report that this approach has been well received. Our efforts to streamline our monitoring and compliance processes were rewarded as Code subscribers increased their level of engagement with the Code. This was evidenced by the quantity and quality of data they provided to us, which included detailed breach data as well as key insights into trends and issues emerging within the industry. I would particularly like to acknowledge the contribution of smaller broker firms, with 30 employees or less, which worked hard to honour their commitments expressed in the Code. By actively participating in code monitoring and compliance, Code subscribers have strengthened the industry s self-regulatory framework, which seeks to foster effective broker client relationships. Building professional competence builds consumer confidence Page 4 of 32

5 in the sector, and greater efficiencies and transparency within the industry as a whole. In short, everyone benefits. I am delighted with the collaboration and consultation we have had with Code subscribers and other stakeholders during the year. It has allowed us to develop consensus on issues and areas where we can work together to improve industry practice, share our experience of code compliance and showcase areas of good industry practice and service delivery. Importantly it has placed us in a strong position to transition smoothly from the current Code to a revised code, which came into effect on 1 January Thank you to everyone who has engaged with my team over the reporting period. I look forward to working with you and the inaugural Code Compliance Committee in the coming year as we transition to the revised Code. Dr June Smith General Manager Code Compliance & Monitoring The year at a glance Compliance monitoring and breach reporting We introduced a new streamlined compliance monitoring process to better balance our monitoring requirements with a firm s capacity to respond. Our redesigned program was well received by Code subscribers 95% returned their submissions on time and feedback on the new process was largely positive. Where necessary we will fine-tune our program for Code subscribers increased their level of engagement with the Code, as evidenced by the quantity and quality of data provided. 88% of the 137 members completing the short form self certification program reported a fully compliant outcome. 91 Code subscribers completing the Annual Compliance Statement return reported: o 430 breaches (consistent with the aggregate of 1,683 breaches reported by all 443 members last financial year). o five significant Code breaches (we requested the reporting of significant breaches for the first time this year an important milestone). o 321 customer complaints 56% of members identified client complaints as part of their internal dispute resolution processes. This compares to the increase Page 5 of 32

6 in disputes between general insurance brokers and their customers registered by the Financial Ombudsman Service (FOS), up from 112 to 195 in o four instances of non-compliance with the Code, which were identified from internal analysis of complaints. o 70% of customer complaints resolved within 21 days (this is an important area for improvement). All Code subscribers reported that identified breaches were promptly rectified. Code subscribers introduced several new initiatives to improve Code awareness, monitoring and breach identification within their operations. Investigations and Own Motion Inquiries No allegations of potential breaches of the Code were raised by third parties. Stakeholder engagement We published eight articles in the NIBA Gazette to share our knowledge and experience of Code compliance and good practice. We attended nine speaking engagements including three NIBA and broker events. Administration We achieved our work plan objectives within the approved budget. Code administration Principles FOS, as Code Administrator, supports the principles and commitments made in the Code and aims to influence positive and effective changes in industry behaviour consistent with the Code s objectives. Our operations are based on five key principles: independence in operations, governance and decision-making accountability in undertaking functions for the benefit of the insurance broking industry and its clients transparency through open engagement with stakeholders fairness in deliberations and processes, and accessibility to Code monitoring and investigation services FOS Annual Review, page 66. Page 6 of 32

7 Functions Our key functions are as follows (also refer Diagram 1): administer the Code on behalf of NIBA establish and maintain a register of Code members monitor and report on compliance with the Code standards investigate alleged breaches of the Code review compliance of Code members with the Code receive compliance reports and monitor and report on Code member adherence to minimum reporting standards, and advise NIBA on a range of matters related to the Code, including the operations of the Code and supporting Code procedures, the provision of professional education and recommendations for improved industry practice. Diagram 1 Compliance functions Secretariat Dr June Smith, General Manager, Code Compliance & Monitoring July 2011 current Dr June Smith (BA (Hons)/LLB/PhD) has significant expertise in corporations law, compliance and regulatory frameworks in the financial services sector. June has a PhD in Law from Victoria University specialising in professional and business ethics and organisational decision-making within financial services organisations. Page 7 of 32

8 Her external appointments include Deputy Chair of the Conduct Review Commission of the Financial Planning Association of Australia, Member of Racing Victoria s Racing Appeals and Disciplinary Board, Member of the Lexis Nexis Financial Services Editorial Committee, Member of the Victorian Department of Health s Human Research Ethics Committee, and Victoria University Alumni Ambassador. Daniela Kirchlinde, Compliance Manager (part time) Daniela Kirchlinde has a background in dispute resolution and broad insurance industry experience, having worked in Australia and overseas. Daniela has a Bachelor of Commerce from Cologne University and holds the German equivalent of the Australian Insurance Institute Associate membership and a Graduate Diploma in Finance and Investment from the Securities Institute of Australia. Code monitoring activities As the Code Administrator, we independently monitor Code subscribers compliance with their Code obligations in accordance with section 5.6 of the NIBA Insurance Brokers Code of Practice Procedures. Section 5.6 provides that the Code Administrator may review Code compliance by Code members at its discretion during the reporting year. We monitor compliance in a number of ways, including through our Annual Compliance Statement (ACS) program, which provides valuable information about compliance issues, emerging risks and potential areas for industry improvement, as well as an understanding of compliance challenges in an insurance broking environment. For Code members, the program gives them the opportunity to report on areas of noncompliance with Code obligations, share information with us about areas of good industry practice and highlight areas for priority attention. This helps us to identify the: level of industry compliance with the Code appropriateness of member responses to breaches and remedial actions, and areas for future compliance monitoring programs and guidance. We also conduct Inquiries that assess compliance with the Code in specific areas. These themed reviews may involve desktop audits and a range of other monitoring activities. Collectively, these activities provide us with compliance information that enables us to help Code subscribers improve their services and honour their commitments expressed in the Code. Code monitoring framework Our ACS program has been in operation for three years and our requirements and processes are evolving with experience. We are mindful that many Code subscribers have Page 8 of 32

9 limited resources to respond to our ACS program and follow-up processes. As such it has always been our intention to enhance their compliance capabilities progressively. In this context, we consulted widely with NIBA and Code subscribers to gain their views on our ACS program and processes. We were particularly keen to hear from Code subscribers about the time and costs involved in completing the ACS as we were acutely aware of the varying organisational sizes and administrative capacities of the membership base of more than 400 broker firms. Code subscribers input into the consultation process was both valuable and appreciated. Many raised concerns about the one size fits all approach of the existing ACS program and suggested that a more targeted approach would be beneficial and make our review process more effective. In response to this feedback we redesigned our program to streamline ACS requirements while facilitating at least one compliance-related interaction with each member per year, implementing the following changes in : Category 1 Category 2 Category 3 Category 4 34% of Code subscribers participate in a short form Compliance Self Certification program 22% of Code subscribers participate in the more detailed ACS program 22% of Code subscribers participate in a desktop audit in 2014 to verify compliance, and 22% of Code subscribers participate in an Own Motion Inquiry in 2014 to assess the effectiveness of Code training programs for staff. The Code subscriber selection process was weighted according to business size and location to ensure that breach and complaints data percentages provided an indicative view of the overall industry position (refer to Tables 2 and 3). Overview of results This redesigned program resulted in a significant improvement in the timely submission of information by Code subscribers. Ninety-five percent of Code subscribers returned their Annual Compliance Statements and Compliance Self Certification by the due date compared to the 51% on time rate achieved last financial year. Following are key results from the data: 88% of the 137 Code subscribers completing the short form Compliance Self Certification program (category 1) reported a fully compliant outcome. There were 430 Code breaches identified by the 91 Code subscribers providing the detailed ACS information (category 2); five of these breaches were identified as significant. Page 9 of 32

10 56% of these 91 Code subscribers reported client complaints as part of their internal dispute resolution processes (compared to 32% last year). There were 54 instances of non-compliance with the Code identified from internal analysis of these complaints. There were significant improvements to Code compliance frameworks and capability identified in the ACS narrative information. Feedback We asked Code subscribers to estimate the number of hours they needed to complete the category 1 and 2 components to help us to understand the impact on resources. We also requested comments on ACS content and suggestions for improvement. Feedback was largely positive. Comments received included: speaking to brokers to ask their input on ways that they felt we had improved our compliance in the last 12 months was very helpful reading the application and gathering information I estimate this will take half the time in following years double-checking with registers took the longest time and the pre work took the longest... reviewing breach, complaint, reporting and consideration of improvements implemented in the last 12 months to document. Category 1 Compliance Self Certification program Code compliance forms an integral part of a Code subscriber s wider risk management and control responsibilities. Following an investigation and review, a common risk management control within broker operations is to provide a certification, issued by senior management, which identifies the extent to which these responsibilities were undertaken effectively as well as areas of non-compliance. The purpose of the Compliance Self Certification program is to leverage from these existing control assessment processes. Following a careful assessment and testing of the compliance framework, the Self Certification requires a declaration from the Chief Executive Officer or designate that the Code subscriber was either: fully compliant with Code obligations, or partially compliant/working towards compliance with Code obligations. Code subscribers completing the Compliance Self Certification declaration were requested to select the most appropriate response as outlined in Table 1. We requested no further information from these Code subscribers to substantiate their declaration but may ask for additional information during follow-up desktop audits or Own Motion Inquiries. Aggregated data drawn from the 137 Code subscriber responses received by the due date of September 2013 are outlined in Table 1. Page 10 of 32

11 Table Self Certification declaration Fully compliant with Code obligations 1. Organisation is compliant with all applicable aspects of the Insurance Brokers Code of Practice (the Code). 2. Organisation has promoted its commitment to the Code. 3. If required, organisation can provide documentation and evidence that supports compliance with the Code. Partially compliant/working towards compliance with Code obligations 1. Organisation is working towards compliance with all applicable aspects of the Insurance Brokers Code of Practice (the Code). 2. Organisation is working to promote its commitment to the Code. 3. If required, organisation can provide documentation and evidence that supports the current level of compliance with the Code. 4. Organisation has responded promptly to rectify any Code breaches identified throughout the reporting period and has minimised the risk of the breach recurring. 4. Organisation has responded promptly to rectify any Code breaches identified throughout the reporting period and has minimised the risk of the breach recurring. 88% 12% Table 2 outlines the spread of Code members participating in the Compliance Self Certification program. Table 2 Number of Code subscribers (by State and Territory and business size) participating in the Compliance Self Certification program Size of ACT NSW NT Qld SA Tas Vic WA Total business Small Medium Large Total Based on the declarations provided by member senior management, we have assessed the 88% fully compliant result as being a satisfactory outcome. However, we are unable to draw any meaningful conclusions about industry trends in the first year of data collection and will continue to monitor compliance outcomes in the reporting period. 3 Up to 30 employees FTE (Full Time Equivalent) 4 31 to 100 employees FTE 5 More than 100 employees FTE Page 11 of 32

12 Category 2 Annual Compliance Statement (ACS) program We selected 100 Code subscribers to complete the more detailed ACS return. This return provides us with quantitative and narrative information on a number of Code-related areas including: Code compliance frameworks recording and rectification of Code breaches, and complaints handling processes. Table 3 outlines the spread of Code subscribers participating in the Annual Compliance Statement (ACS) program. Table 3 Number of Code subscribers (by State and Territory and business size) participating in the Annual Compliance Statement (ACS) program Size of ACT NSW NT Qld SA Tas Vic WA Total business small medium large Total Our selection process was influenced by business size and location to generate breach and complaints data that are indicative of overall industry compliance rates. Self-reported Code compliance breaches Quantitative analysis We drew the following significant observations from our analysis of data provided by the 91 Code subscribers that completed the ACS: 430 Code breaches were reported and although comparisons are not like for like, the level of reported breaches is consistent with the aggregate of 1,683 breaches reported by all 443 Code subscribers last financial year. 33 of the 100 Code subscribers reported at least one instance of non-compliance with Code obligations. 66% of breaches were reported by the smaller firms Code subscribers with up to 30 employees (Full Time Equivalent) (Refer Table 5 in Appendix D). The 2013 ACS included the reporting of significant breaches for the first time; three Code subscribers reported five significant breaches of the Code. 6 Up to 30 employees FTE (Full Time Equivalent) 7 31 to 100 employees FTE 8 More than 100 employees FTE 9 Completed responses were received from 91 of the 100 members by the due date of 30 September Page 12 of 32

13 Of the 430 breaches reported by Code subscribers, the major areas of non-compliance with Code obligations classified by Code clause were, on a percentage basis, as follows: 39% buying insurance, with the main sections being 22% for variation, reinstatement, replacement, renewal or cancellation (section 7.1g), and 8% for insurance notices (section 7.1h) 18% exercising reasonable care and skill (section 5.2b) 11% disclosure of remuneration (sections ) 7% manage conflict of interest (section 9.2) 7% comply with law (section 5.2c and 8.1b), and 6% money handling (section 11). Chart 1 Percentage of self-reported breaches by Code category We encourage all Code subscribers to consider these areas of risk when setting training Code compliance monitoring programs for the coming year and when transitioning to the revised Code. Page 13 of 32

14 Chart 2 Percentage of self-reported breaches by Code clause Significant breaches As outlined in the ACS, a significant breach is determined by considering a range of factors including: if similar breaches have occurred in the Code subscriber s operations the number of customers affected the adequacy of arrangements to ensure compliance with the Code the extent of customer detriment rectification and costs incurred, and the period of time over which the breach occurred. The ACS requested the reporting of significant breaches for the first time and has been an important milestone in the evolution of the ACS process. In many respects the extent of significant breaches identified over a year represents the most important indication of Code compliance as, by definition, these breaches have the most impact on customers. Often these breaches together with remedial actions have been additionally reported to the Australian Securities and Investments Commission (ASIC). Page 14 of 32

15 In three of the 91 Code subscribers who completed the ACS reported five significant breaches of their Code obligations. Three significant breaches related to breaches of law and two breaches related to money handling and training. Specific details about the significant breaches and their outcomes are outlined in Table 4 below. Table 4 Significant Code breaches reported by Code subscribers 10 Code category Training Code section 5.2c Comply with law 8.3 Reps/Employee training No of breaches 1 1 Issue Background Outcome No formal training plan in place for Authorised Representatives (AR). No plan in place as AR is wholesale provider only and refers clients to member office for advice. As such the AR does not deal directly with the client. Code does not apply to wholesale provider. In process of reviewing training plan with the AR. Money handling, training, Internal Dispute Resolution and other General legal standards 11 Money handling 5.2c Comply with law 1 Processing error resulted in incorrect processing of $60,000 fees and commission on refund premiums. 1 Failure to update ASIC Responsible Manager records. Human error and a lack of system understanding. Lack of administrative oversight. Error corrected within 24 hours and correct refunds submitted to clients electronically. Notification provided to ASIC. 1 Failure to include combined Financial Services Guide in client documentation. Error in processing requests at third party mail house facility. Impacted clients provided with the required Financial Services Guide. Notification provided to ASIC. Appendices B, C and D provide additional data collated from the ACS information members participated in the ACS program. Page 15 of 32

16 Improvements to Code compliance processes We are pleased to acknowledge the important initiatives identified by Code subscribers in the ACS program to improve Code awareness, monitoring and breach identification within their operations. Some of their initiatives are outlined below. Breach reporting In the March 2013 edition of the NIBA Gazette we alerted Code subscribers to the requirements of ASIC Regulatory Guide 78 Breach reporting by AFS licensees (RG 78). It is essential Code subscribers have effective Internal Dispute Resolution and Code breach reporting and monitoring procedures so that complaints and disputes arising from Code obligations and Code breaches are dealt with promptly, fairly and consistently. Code subscribers reported that they have reviewed procedures, guidelines and registers to ensure that they are able to capture all the necessary Code compliance data and as a guide using ASIC s regulatory guidelines for breach reporting. Monitoring programs Code subscribers placed greater emphasis on Code compliance monitoring in their operations this year. Initiatives included completing compliance checklists and conducting specific Code compliance audits, including targeted client file reviews of authorised representatives. Monitoring ranged from formal programs undertaken by dedicated compliance and internal audit staff in the larger broking firms to internal supervisory checks undertaken by smaller firms. Smaller firms also contracted specialist compliance auditors to undertake compliance monitoring programs. Training and information Code subscribers: promoted awareness programs to encourage staff to report actual and suspected breaches updated websites, financial services guides and product terms and conditions to better align with the provisions of the Code, and improved staff training this included discussing case studies at staff meetings and developing Code training modules. Page 16 of 32

17 Remedial actions on Code breaches Information provided in the ACS indicates that most Code subscribers have established processes within their compliance framework to analyse the root cause of a breach of their Code obligations and when necessary remedy Code breaches and mitigate risks of any recurrence. All Code subscribers reported that identified breaches were promptly rectified and, when necessary, redressed with affected clients. Significant Code breaches, usually involving systemic failures, were separately identified and their resolution was monitored by management. Remedial actions undertaken by Code subscribers included: refunds to clients and letters of apology forwarding outstanding documentation to clients, such as the Financial Services Guide, and remedial training programs for staff. Internal Dispute Resolution Background We requested statistical information from Code subscribers about the number of consumer complaints and complaint resolution times they recorded during the reporting year to assess the effectiveness of their processes and procedures in meeting the obligations of section 16 Resolving Complaints of the Code. In particular, we assess complaints data in regards to: registering complaints effectively accessing information for assessing complaints and disputes identifying underlying issues and potential Code breaches monitoring the complaints and disputes process rectifying procedures, guidelines and training accordingly arranging payments for compensation where appropriate complying with relevant timeframes (eg 20 business days for assessment or investigation), and advising of external dispute resolution (EDR) information. The ACS requested the following aggregate complaints handling data recorded in Code subscribers internal dispute resolution (IDR) systems: service/product area issues involved resolution outcomes, and timeframes to resolve disputes. Page 17 of 32

18 Quantitative results The following significant observations are based on our analysis of data provided by the 91 members participating in the ACS program: Code subscribers received 321 complaints from clients 56% of Code subscribers reported at least one customer complaint (compared to 32% of total Code subscribers in the previous financial year) Code subscribers identified 54 instances of non-compliance with the Code from internal analysis of the 321 complaints. major service/product areas concerned obligations associated with small business (24%), sickness and accident (15%), home building (12%) and personal motor vehicle (10%) insurance policies 43% of complaints were resolved within five days, 70% within 21 days and 82% within 45 days, and 63% of complaints were resolved in favour of the client or by mutual agreement. This is only the first year we requested this specific data in regards to products, issues, outcomes and timeframes of complaints handling. We will be in a better position to understand and monitor such data as we gather information over a period of years. Typical comments received in regards to registered internal complaints included: client not happy with cancellation fees client not advised of credit card surcharge client dissatisfied with claim timeframe quote did not show broker s fee (only invoice did) poor response time to telephone inquiries to policy cover client was not advised that policy was cancelled and subsequent claim was not covered client did not received appropriate information regarding premium funding conditions and fees involved when cancelling the policy client not happy with renewal premium client did not receive renewal documents in time, and incorrectly documented excess. Creating effective internal dispute resolution is an essential aspect of the broker/client relationship. Page 18 of 32

19 Chart 3 Percentage of complaints made to Code subscribers by service/product Clearly, small business services and products (24%) resulted in most complaints, followed by sickness & accident (15%) and home building (12%). Chart 4 Percentage of complaints made to Code subscribers by issue Page 19 of 32

20 Interestingly, most of the complaint issues appear to be matters that are easy to fix: communication effective disclosure of fees, and timeliness of service provisions. Service provisions (28%) and decision making (26%) seem to be a critical factor arising out of complaints in the reporting period. Chart 5 Percentage of complaints made to Code subscribers by outcome An 8% conversion rate to external dispute resolution (EDR) of complaints is a very good outcome. Of interest to us is the 35% resolution rate in favour of the client compared to the 15% in favour of the insurance broker. 78% of all internal dispute resolution (IDR) complaints were reported as being resolved with the client. Chart 6 Percentage of complaints made to Code subscribers by resolution Timely and effective resolution of complaints should be the main objective. We encourage all Code subscribers to review their own IDR system and resolve rates against this data. Page 20 of 32

21 Investigations Background The Code provides for us to receive and investigate allegations from any party that a breach of the Code may have occurred. Claims by Code subscribers clients for compensation and loss cannot be considered. Our investigations aim to identify the cause of alleged breaches and whether broader Code compliance issues are present, rather than assessing compensation claims. Our investigations also consider the effectiveness of remedial actions taken by Code subscribers to minimise the impact of non-compliance on clients. Two types of investigation can be undertaken: investigations into an allegation made by a client of an insurance broker that Code obligations may have been breached, and investigations that are initiated by the Code Administrator. Complaints investigations There were no allegations of potential breaches of the Code raised with us by any parties over the reporting period. This experience is consistent with the low number of disputes received by external dispute resolution schemes about insurance brokers conduct. Nevertheless, we recommended that there should be enhanced promotion of the Code s complaints function and the functions and responsibilities of the new Code Compliance Committee during the transition phase to the revised Code. This will be important to ensure that all parties are aware of their rights and responsibilities under the Code. There were no outstanding complaints from the previous reporting period. Self-initiated investigations We initiate investigations where necessary, primarily to identify and assess: non-compliant behaviour that may not have been identified by Code subscribers compliance monitoring systems or their ACS, and potential or emerging Code compliance risks that may affect Code subscribers and their clients. We did not initiate any investigations this financial year and there were no outstanding investigations from the previous period. Engaging with industry and stakeholders We play an important role in sharing knowledge and experience of Code compliance and good practice and encouraging and influencing Code subscribers to improve service standards. Page 21 of 32

22 To achieve these aims we: review industry practices and shares peer review information and benchmarks, and publish reports, research papers and other educational material with stakeholders. Publications During the year we published eight articles on Code compliance and related activities in the NIBA Gazette (July 2012, September 2012, October 2012, November 2012, December 2012, March 2013, April 2013 and June 2013 issues). These articles provided Code subscribers with guidelines and commentary on subjects including annual compliance statements, complaints handling processes and compliance breach registers. Training We increased our engagement with Code subscribers on Code compliance issues by: undertaking three presentations on External Dispute Resolution and Code issues at the NIBA Tier 1 workshops in Sydney (1 May 2013) and Melbourne (25 July 2012 and 10 April 2013), and engaging with members at the NIBA Victorian industry luncheon in May Submissions and assistance We consulted extensively with NIBA and the independent Code reviewer during the recent review and update of the Code. Introduction to the revised 2014 Insurance Brokers Code of Practice Background As part of a periodic process of Code review and update, an external review of the 2006 Code was commissioned by NIBA in March 2012 and was completed in August The review included consultation with key stakeholders including NIBA members, the Australian Securities and Investments Commission (ASIC), the federal government, consumers and others involved in the insurance industry. We provided extensive assistance to the external reviewer and NIBA during the Code review process Insurance Brokers Code of Practice The independent reviewer has concluded that the revised 2014 Insurance Brokers Code of Practice adopts plain English principles to inform readers of Code coverage, standards of conduct and governance. There are 12 performance standards contained in the revised Code supported by explanatory information. The achievement of these performance standards will be monitored by the newly formed independent Code Compliance Committee from 1 January Page 22 of 32

23 The functions of the new Code Compliance Committee are to: monitor compliance with the Code by subscribing insurance brokers investigate and make a determination on whether a subscribing insurance broker has breached the Code, and review compliance across the industry by conducting inquiries on particular areas of concern or topical issues. We will continue to be actively engaged as we will be providing administrative secretarial services to the Committee. A copy of the 2014 Code can be downloaded from the NIBA website at Future outlook In , we will continue to share our experience of Code compliance and help the industry transition to the revised Code Our proposed priorities over the 12 months are outlined below. Transition to the revised Code Assist the newly formed Code Compliance Committee to ensure it is operational and effective as soon as possible. Early attention will be directed to governance and secretariat process and procedures and obtaining endorsement of key priorities, including the compliance monitoring plans. Compliance monitoring and breach reporting Continue to develop and refine the compliance monitoring and reporting processes in consultation with NIBA and its members to ensure it is targeted and cost effective. Investigations and Own Motion Inquiries Undertake desktop audits and Own Motion Inquiries in early 2014 as part of the revised Annual Compliance Statement process. Stakeholder engagement Collaborate with key stakeholders to promote compliance with the Code. Continue to share experiences through the release of reports and updates (including bulletins) on our website. Industry developments Assess the impact of emerging regulatory developments on the sector that have implications for Code subscribers and their Code compliance frameworks. These include the introduction of new Australian Privacy Principles from March 2014 and the development of a new risk management standard by the Australian Prudential Regulation Authority, proposed for January Page 23 of 32

24 Appendix A: Schedule of Code subscribers as at 31 October 2013 Abico Insurance Brokers Pty Ltd Access Insurance Brokers Pty Ltd Access Underwriting Management Pty Ltd ACE-IRM Insurance Broking Group Acedrift Insurance Brokers Pty Ltd ACI Broking (VIC) Pty Ltd ACI Broking (WA) Pty Ltd ACI Broking Services Pty Limited ACME Insurance Brokers ACN Pty Ltd Action Insurance Brokers Pty Ltd Actuate Insurance Broking Pty Ltd Adroit Insurance Group Pty Ltd AFA Insurance Brokers Affinity Risk Partners (Brokers) Pty Ltd AFM Insurance Brokers Pty Ltd Agririsk Services Pty Ltd AIB Pty Ltd Insurance Brokers AIIB Pty Ltd AIS Insurance Brokers Pty Ltd AllCover Insurance Brokers Pty Ltd Alliance Insurance Broking Services Pty Ltd Allsafe Insurance Brokers Pty Ltd AMACIS Pty Ltd ANCA Insurance Brokers Andrew Young & Associates Pty Ltd Andrews Insurance Services Pty Ltd Annis Group Pty Ltd Aon Risk Services Australia Limited Arena Underwriting Pty Ltd Armbro Insurance Brokers Pty Ltd Arrowsmith & Petruccelli Insurance Brokers Pty Ltd Arthur J Gallagher (Aus) Pty Ltd Assent Insurance & Financial Services Pty Ltd Asset Insurance Brokers Pty Ltd Assurity Pty Ltd ATC Insurance Solutions Pty Ltd Atia Insurance Services Limited Atlantic Insurance Brokers Pty Ltd Aughtersons Insurance Brokers Pty Ltd Aurora Underwriting Agency Pty Ltd Austbrokers AEI Pty Ltd Austbrokers CE McDonald Pty Ltd Austbrokers Central Coast Pty Ltd Austbrokers City State Austbrokers Coast to Coast Austbrokers HCI Austbrokers Phillips Pty Ltd Austbrokers Premier Pty Ltd Austbrokers Ris Pty Ltd Austbrokers RWA Pty Ltd Austbrokers Southern Pty Ltd Austbrokers Sydney Pty Ltd Austcover Pty Ltd Austgroup Insurance Brokers Austinsurance Broking Group Pty Ltd Austock Insurance Brokers Pty Ltd Austral Anglo Pty Ltd Austral Insurance Brokers Pty Ltd Australasia Insurance Brokers Pty Ltd (AAIB) Australian Income Protection Pty Ltd Australian Insurance Agency Pool Pty Ltd Australian Insurance Solutions Pty Ltd Australian Reliance Pty Ltd Ausure Pty Ltd Avoca Group Pty Ltd AWIB Pty Ltd Ballarat Insurance Brokers Pty Ltd Barrenjoey Lifestyle Pty Ltd Barrie MacDonald & Associates Barry Stowe Insurance Brokers Bass Insurance Brokers Pty Ltd Bayside Brokers Pty Ltd Bcoz Underwriting Agencies Pty Ltd Bellrock Broking Pty Limited Berkrey Insurance Consultants Pty Ltd Bestmark Pty Ltd BJS Body Corporate Insurance Brokers Pty Ltd BJS Insurance Broker (Gippsland) Pty Ltd BJS Insurance Brokers (SA) Pty Ltd BJS Insurance Brokers (Southern) Pty Ltd BJS Insurance Brokers Pty Ltd Blackburn (Insurance Brokers) Pty Ltd Blue Broking Pty Ltd BMG Aviation Pty Ltd Bolderston & Associates Insurance Brokers Bourchier Nominees Pty Ltd ATF The Coastal Unit Trust Bovill Risk & Insurance Consultants Pty Ltd Bowen Insurance Brokers Pty Ltd Brecknock Insurance Brokers (VIC) Pty Ltd Page 24 of 32

25 Brecknock Insurance Brokers Pty Ltd Brett Grant & Associates Pty Ltd Bricher Insurance Brokers Brokers National Brookvale Insurance Brokers Pty Ltd Bruce Chiene Pty Ltd Bruce Park Pty Ltd Bugg Goninon Pty Ltd Buildsafe Insurance Brokers Pty Ltd Cambridge Insurance Brokers Camneldo Pty Ltd Capital Insurance (Broking) Group Pty Ltd Capital Insurance Brokers Pty Ltd Capital Mutual Insurance Brokers Pty Ltd Carriers Insurance Brokers Pty Ltd Cartwright Insurance Brokers Pty Ltd Central Insurance Brokers Centrewest Insurance Brokers Centric General Insurance Services Pty Ltd Centro Group Pty Ltd Cerberos Brokers Pty Ltd City Acceptance Corporation Pty Ltd City Rural Insurance Brokers Pty Ltd Citycover (Aust) Pty Ltd CKA Risk Solutions Pty Ltd CN Botting & Associates (Broking) Pty Ltd Coast Wide Insurance Brokers Pty Ltd Commercial Reality Insurance Brokers Pty Ltd Comsure Insurance Brokers Pty Ltd Consolidated Insurance Agencies Pty Ltd Corporate Insurance Brokers Pty Ltd Corporate Underwriting Agencies Pty Ltd Country Mile Insurance Brokers Countrywide Tolstrup Financial Services Group Pty Ltd Coverforce IUS Pty Limited Coverforce Pty Ltd Coversafe Insurance Brokers Pty Ltd Cowden (NSW) Pty Ltd Cowden (SA) Pty Ltd Cowden (VIC) Pty Ltd Cowden Limited Cranston Australia Pty Ltd Craven Insurance Services Credit Insurance Brokers Pty Ltd D'Angelo Insurance Brokers Damons Insurance Brokers Pty Ltd Darling Downs Insurance Brokers Pty Ltd Davelcorp Insurance Brokers Pty Ltd David Marks Insurance Brokers Pty Ltd De Conno & Blanco Insurance Brokers Delaney Kelly Golding Pty Ltd Dennis Foster Insurance Brokers Pty Ltd DHB & Associates Pty Ltd DIB Insurance Brokers Pty Ltd Direct Insurance Brokers Pty Ltd DMA Insurance Brokers Pty Ltd Domina General Insurance Brokers Pty Ltd Don Hutton Insurance Brokers Pty Ltd Donnelly Insurance Brokers Pty Ltd Dove Insurance Brokers Pty Ltd Downunder Worldwide Travel Insurance Driessen Insurance Brokers Pty Ltd E-Quine Insurance Services Pty Ltd Eagle Insurance Brokers Pty Ltd East West Insurance Brokers Pty Ltd EDA Group Pty Ltd Edgewise Insurance Brokers Pty Ltd EIB Insurance Brokers Pty Ltd Elite General Insurance Services Pty Ltd Elkington Bishop Molineaux Insurance Brokers Pty Ltd Emjay Insurance Brokers Pty Ltd Empire Insurance Services Pty Ltd Endeavour Insurance Broking Group Pty Ltd Family Day Care Australia Ltd FD Beck & Sons Pty Ltd Finance And Insurance (Brokers) Australia Finn Foster & Associates Pty Ltd Finpac Insurance Advisers Pty Ltd Finsura Insurance Broking (Australia) Pty Ltd Fitzpatrick & Company Insurance Brokers Ford Kinter & Associates Pty Ltd FP Insurance Brokers FP Marine Risks Limited Frankston Insurance Brokers Pty Ltd Fraser and Associates Insurance Brokers Pty Ltd G & L M Guy G.W.S. Pty Ltd Gale Insurance Brokers Pty Ltd Gallivan Magee & Associates Pty Ltd Gamman Insurance Brokers Pty Ltd Page 25 of 32

26 Garaty Murnane Insurance Brokers Pty Ltd Gary Morton Insurance Brokers Pty Ltd Gateway Insurance Brokers Pty Ltd General Security Australia Ins Brokers Pty Ltd Ginn & Penny Pty Ltd Glenowar Pty Ltd Global Transport & Automotive Insurance Solutions Pty Ltd Gordon Wilson & Associates Pty Ltd Goulburn Insurance Brokers Pty Limited Gow-Gates Ins Brokers (Australasia) Pty Ltd Gow-Gates Insurance Brokers Pty Ltd Grange Insurance Solutions Pty Ltd Great Wall Insurance Services Pty Ltd Greater National Limited Griffiths Goodall Insurance Brokers Pty Ltd Guardian Insurance Brokers Pty Ltd H & L Lewis Pty Ltd Hamilton Brokers Pty Ltd Hann Insurance Brokers Pty Ltd Harrison Read Insurance Brokers Pty Ltd Hawksford Insurance Brokers Haywood Wilkins & Associates (Vic) Pty Ltd HIB Insurance Brokers Pty Ltd Hignett-Knight Insurance Brokers Hirtes Insurance Brokers Pty Limited Hiscock Insurance Brokers Pty Ltd Honan Insurance Group Pty Ltd Horsell International Pty Ltd HW Wood Australia Pty Ltd Ian Bell Insurance Brokers Pty Ltd Ian Hewitt and Associates IBL Limited ICF (Australia) Pty Ltd IJD Insurance Brokers Pty Ltd IMC Insurance Brokers Indemnity Corporation Pty Ltd Instrat Insurance Brokers Pty Ltd Insurance Advisernet Australia Pty Limited Insurance Advisory Service (NSW) Pty Ltd Insurance Aid General Brokers Partnership Pty Ltd Insurance Brokers of NSW Pty Ltd Insurance Broking Group (Holdings) Pty Ltd Insurance House Pty Ltd Insurance Logic Pty Ltd Insurance Marketing Group of Aust Pty Ltd (IMGA) Insurance Solutions Corporation Pty Ltd Insurance Solutions Tasmania Pty Ltd Insure That Insurance Broking Pty Limited Insurex Pty Ltd Insurics Pty Ltd Intercharge Pty Ltd Interlink Insurance Brokers Interpacific Insurance Brokers Pty Ltd Interrisk Australia Pty Ltd Intersure Pty Ltd IPS Insurance Brokers IRT Insurance Pty Ltd IUG Services Pty Ltd Jardine Lloyd Thompson Pty Ltd JHR Corporate Risk Services Pty Ltd Jims Insurance Services Pty Ltd JMD Ross Insurance Brokers Pty Ltd Joe Vella Insurance Brokers Pty Ltd Johansen Insurance Brokers Pty Ltd John Bernard & Associates Pty Ltd Johnson Pacific Pty Ltd JW Bell & Associates Pty Ltd KE Skilton & Associates Pty Ltd Kelly & Coe Insurance Brokers Pty Ltd Ken Tame & Associates Pty Ltd Kinnane Insurance Brokers Pty Ltd Kleiman Shemer Insurance Brokers Pty Ltd Knightcorp Insurance Brokers Knights Guard Pty Ltd Koch Brokers Pty Ltd Lanyon Partners Insurance Brokers Pty Ltd LEA Insurance Brokers Pty Ltd Link Insurance Brokers Lockton Companies Australia Pty Ltd Logan Insurance Brokers Pty Ltd Logan Livestock Insurance Agency Pty Ltd LTM Group Pty Ltd Lundie Insurance Brokers Pty Ltd M & S Insurance (Brokers) Services Pty Ltd MA Risk Solutions P/L Macey Insurance Brokers Pty Ltd Mackellar Insurance Brokers Pty Ltd Macquarie Insurance Brokers (Australia) Pty Ltd Made Easy Financial Group Pty Ltd Magic Millions Insurance Brokers Pty Limited Page 26 of 32

27 Malcolm Hutson & Associates Pty Ltd Management & Risk Insurance Brokers Mandurah Insurance Brokers Pty Ltd Markey Group Pty Ltd Marsh Advantage Insurance Pty Ltd Marsh and McLennan Agency Pty Ltd Marsh Pty Ltd Masefield Holdings Pty Ltd Masterman Insurance Brokers Pty Ltd Maxton Insurance Brokers MCA Insurance Brokers Pty Ltd McCormick Harris & Associates Pty Ltd McKenna Hampton Insurance Brokers Pty Ltd McKenzie Ross & Co Pty Ltd McKillop Insurance Brokers Pty Ltd McNair Hurle Latrobe Insurance Brokers Pty Ltd McNaughton Gardiner Insurance Brokers Pty Ltd MD Insurance Brokers Pty Ltd Mega Capital Pty Ltd Melbourne Insurance Brokers Pty Ltd MFP Insurance Brokers MGA Insurance Brokers Pty Ltd Midas Insurance Brokers Pty Ltd Midland Insurance Brokers Australia Pty Ltd Mienham Pty Ltd Milne Alexander Pty Ltd Mooneys Insurance Brokers Pty Ltd Moran Insurance Brokers Pty Ltd Multi Secure Insurance Solutions Pty Ltd Mutual Brokers Pty Ltd Nadic Insurance Brokers Pty Ltd NAS Insurance Brokers National Corporate Broking Pty Ltd National Underwriting Agencies Pty Ltd Nationwide Insurance Brokers Pty Ltd Nepean Brokers & Associates Pty Ltd Newmarket Insurance Brokers Pty Ltd Nexus (Aust) Pty Ltd North Coast Insurance Brokers Pty Ltd North Queensland Insurance Brokers Pty Ltd Northern Tablelands Insurance Brokers Pty Limited NSP Insurance Brokers Pty Ltd O'Regan Group Pty Ltd O'Sullivan Insurance Brokers Pty Ltd OAMPS Insurance Brokers Ltd Oceanic Marine Risks Pty Ltd Optimus 1 Pty Ltd Orrs & Associates Pty Ltd Ovens Valley Insurance Brokers Pty Ltd Oxford Insurance Brokers Pty Ltd Oxley Insurance Brokers Pty Ltd Paramount Insurance Brokers Pty Ltd Parmia Pty Ltd Paul Donnelly Insurance Brokers Pty Ltd PB Broking Pty Ltd Perryman O'Grady Philpott Pty Ltd Peter L Brown & Associates Pty Ltd Peter Vickers Insurance Brokers Pty Ltd Phil Doring Insurance Brokers Philp Newby & Owen Pty Ltd Phoenix Insurance Brokers Pty Ltd Piranha Insurance Brokers Pty Ltd PMH Insurance Brokers Pty Ltd Poole & Partners Investment Services Pty Ltd Portclip Pty Ltd Professional Insurance Brokers (McKinnon) Professional Insurance Brokers (NSW) Pty Ltd Professional Insurance Brokers (Vic) Pty Ltd Professional Services Corporation Pty Ltd PSB Insurance Brokers Pty Ltd PSC Connect Pty Ltd PSC Horsell Insurance Brokers Pty Ltd PSC Share Nominees Pty Ltd Queensland & Pacific Insurance Brokers Pty Ltd QUS Pty Ltd Regent Insurance Brokers Pty Ltd Regional Insurance Brokers Richard Oliver Underwriting Managers Pty Ltd Richard Ray & Associates Pty Ltd Risk Insure Pty Ltd Risk Solutions International Pty Ltd Rivers Insurance Brokers Pty Ltd RJ Vaughan and Monaghan Pty Ltd Robert Meech Insurance Brokers Pty Ltd Roderick Insurance Brokers Pty Ltd Rose Stanton Insurance Brokers Pty Ltd RSM Group Pty Ltd Safeguard Insurance Brokers Pty Ltd Safeguard Insurance Solutions Pty Ltd Salisbury Payne Tinslay Pty Ltd Page 27 of 32

28 Sarre Insurance Broking Services SAS Global Insurance Broking Pty Ltd Saunders Higgins Insurance Brokers Pty Ltd Sawtell & Salisbury Pty Ltd SBS Insurance Brokers Scott & Broad Pty Ltd Seamac Insurance Brokers Pty Ltd Sear & Associates Insurance Brokers Pty Ltd Shadforth Insurance Brokers Pty Ltd Sherbourne Insurance Services Pty Ltd Shortland Insurance Brokers Pty Ltd Simplex Insurance Solutions Pty Ltd SMS Insurance Pty Ltd South Coast Insurance Brokers WA Pty Ltd Southern Cross Brokers Pty Ltd Specialised Broking Associates Pty Ltd SRG Group Pty Ltd Stanton Insurance Brokers Pty Ltd Steadfast Group Limited Steel Pacific Insurance Brokers Stening Simpson (International) Pty Ltd Sterling Insurance Pty Ltd Stewards' Insurance Services Pty Ltd Strategic Insurance & Risk Solutions Pty Ltd Strathearn Insurance Brokers TCIS Insurance Brokers Pty Ltd TDH Insurance Services Teamcare Pty Ltd Terrace Insurance Brokers Pty Ltd The Rock Building Society Ltd The Taggart Group Pty Ltd Thomas Insurance Brokers Pty Ltd Tolehouse Risk Services Pty Ltd Tony Bemrose Insurance Brokers TP Gleeson Insurance Brokers Pty Ltd Trafalgar Risk Management Pty. Ltd. Trans-West Insurance Brokers Pty Ltd Trident Insurance Group Pty Ltd Trustee for PA & KM Block Family Trust Tucker McNeil Pty Limited Tudor Insurance Australia (Insurance Brokers) Pty Ltd Tymar (WA) Pty Ltd United Insurance Group Pty Ltd Unity Insurance Brokers Verisure Insurance Brokers Pty Ltd VFP Insurance Brokers Pty Ltd Wagland Salter & Associates Pty Ltd Wallace Risk Solutions Pty Ltd Waratah Insurance Brokers Pty Ltd Warren Saunders Insurance Brokers (Aust) Pty Ltd Watkins Insurance Brokers Webster Hyde Heath Insurance Brokers Pty Ltd Westcourt General Insurance Brokers Pty Ltd Western United Financial Services Pty Ltd Westlawn Insurance Brokers Pty Ltd Westminster Broking House Pty Ltd Whitbread Associates Pty Ltd Wilkinson Insurance Brokers Pty Ltd William Inglis & Son Limited Willis Australia Limited Willis Employee Benefits Pty Ltd Willis Temby Insurance Brokers (WA) Pty Ltd Wilson White Insurance Brokers Pty Ltd Winley Insurance Group WRI Insurance Brokers Pty Ltd WSC Insurance Brokers Pty Ltd Wymark Sirius Insurance Brokers Pty Ltd Yellow Brick Road Wealth Management Pty Ltd Your Insurance Broker Note: The decrease in the number of Code subscribers from 441 to 429 (as at 30 September 2013) follows a series of mergers and acquisitions within the industry over the last 12 months. Page 28 of 32

29 Appendix B: Comparative table of subscriber self-reported Code breaches Category Code sections Breaches 2012 Breaches General 28% 27% Code standards 5.1, 5.2a, 5.2b, 8.1a 25% 20% Legal standards 5.2c, 8.1b 3% 7% Disclosure 6% 19% Associated services % 0% Conflict of interest 9.2 2% 7% Overseas Insurers % 1% Remuneration 10.2, 10.3, 10.4, % 11% Who we act for 6.1, 7.2, 8.1c 3% 0% Provision of insurance broking service 56% 42% Buying insurance 7.1a-h, 18.2a-b 54% 39% Claim handling 14.1a-c, 14.2a-c 2% 3% Disasters 15.2, % 0% Money handling, Training, IDR and Other 10% 12% Dispute resolution 1.2d, 16.1a-d, 16.2, 16.3, 16.4a-b, 16.5, 8.4 1% 1% Money Handling 11 5% 6% Promotion of Code 18.2c 1% 0% Training 18.1, 8.2, 8.3 3% 5% Percentage of brokers providing ACS who advised breaches 34% 33% Number of brokers providing ACS Code subscribers, representing 25% of total subscribers, were selected to participate in the ACS program. The selection process was weighted according to business size and location to generate breach data percentages that are indicative of the overall industry position. Page 29 of 32

30 Appendix C: Comparative table of Code subscriber 12 self-reported complaints Products involved in complaint Issues involved in complaint Outcome of complaint Category 2013 Home Building 39 12% Home Contents 19 6% Personal Motor Vehicle 31 10% Commercial Motor Vehicle 28 9% Personal and Domestic Property 7 2% Strata Title 11 3% Sickness and Accident 49 15% Travel 3 1% Extended Warranty 0 0% Professional Indemnity 7 2% Small Business 76 24% Farm 5 2% Life 4 1% Consumer Credit 0 0% Income Protection 6 2% Other % Advice 29 9% Charges 16 5% Disclosure 7 2% Financial Difficulty 2 1% Financial Service Provider Decision 85 26% Instructions 21 7% Privacy 3 1% Service 91 28% Transactions 13 4% Other 54 17% In favour of insurance broker 49 15% In favour of client % Mutual agreement 89 28% Referred to External Dispute Resolution 27 8% Withdrawn 33 10% Client taken legal action 0 0% Outstanding 10 3% Other 0 0% Code subscribers participated in the ACS program. 13 Other represents the number of complaints that were identified by the Code subscriber in the total number of complaints, but not specified further. Page 30 of 32

31 Timeframe Total number of self-reported complaints resolved within 5 days % resolved within 21 days 88 27% resolved within 45 days 38 12% resolved beyond 45 days 49 15% unresolved as at 30/06/ % Other 0 0% Total number of self-reported complaints involving breaches of the Code 54 17% Number of Code subscribers participating in the ACS program that self-reported complaints % Code subscribers, representing 25% of total subscribers, were selected to participate in the ACS program. The selection process was weighted according to business size and location to generate breach data percentages that are indicative of the overall industry position. Page 31 of 32

32 Appendix D: Additional tables complaints and breach data Table 5 Complaints and breaches by size of Code subscriber In % of total Complaints Breaches reported by Code subscribers with more than 100 employees FTE 17 16% 34% 15% 17% employees FTE 18% 13% 3% 17% up to 30 employees FTE 66% 34% 82% 66% Table 6 Number of Code subscribers reporting complaints for Number of reported complaints Code subscribers completing ACS Nil 64% 44% Between 1 to 10 33% 48% Between 11 to 20 1% 4% Between 21 to 50 1% 3% Between 51 to 100 0% 1% Over 100 0% 0% Table 7 Number of Code subscribers reporting Code breaches for Number of reported breaches Code subscribers completing ACS Nil 65% 64% Between 1 to 10 28% 24% Between 11 to 20 4% 6% Between 21 to 50 2% 4% Between 51 to 100 0% 2% Over 100 1% 0% 15 In 2012 all Code members participated in the ACS program. 16 In 2013 only 100 selected Code members (representing 25% of all Code members) were requested to participate in the ACS program (see also footnote 3) 17 Full Time Equivalent Page 32 of 32