The National Insurance Brokers Association has questioned the value of laws introduced earlier this year forcing brokers to obtain consent for commissions – but the corporate regulator has no plans to modify or overturn them.

The obligations were recommended by Quality of Advice Review head Michelle Levy and took effect on July 10, requiring brokers providing personal advice to obtain informed consent from retail clients before being paid commissions for product sales.

Brokers spoke out against the rules earlier this year, and NIBA has taken up their concerns.

CEO Richard Klipin told insuranceNEWS.com.au that “regulatory overreach” is a major issue for association members.

He says there are “already steps in place” to ensure commissions are disclosed to retail clients and the new rules create duplication and add “cost, complexity and confusion”.

However, Ms Levy stands by her recommendations. 

“I am not persuaded that requiring a broker to obtain their client’s consent to the payment of a commission by the insurer to the broker is an example of over-regulation,” she told insuranceNEWS.com.au.

“I do not think these are onerous obligations, but in my view they are important.”

Ms Levy says disclosure is “not enough” because people do not always read information they are provided. 

“The requirement for consent is intended to ensure the client does read the information or is told about it. If it provokes a conversation between the broker and their client about remuneration and how that might affect the broker’s recommendations, that is a good thing.”

The Australian Securities and Investments Commission says it engaged with industry in the lead-up to the rules’ introduction and provided guidance.

“Informed consent requirements are designed to provide greater protection for consumers by improving transparency and ensuring people have greater understanding and confidence in the advice they receive and any associated payments such as commissions,” a spokesperson said.

insuranceNEWS.com.au understands ASIC has no plans to modify or change the settings for informed consent on insurance commissions.

NIBA says brokers abide by the law and it has provided advice and webinars to assist them in doing so.