Your legal protection

All insurance brokerages in Australia must be licensed and must adhere to the following Acts:

• Financial Services Reform Act,
• The Corporations Act,
• The Insurance Contracts Act

Plus the Insurance Brokers Code of Practice.

A broker is required by law to act in the best interests of the client.  It is important to remember that an insurance broker acts on behalf of their client, not on behalf of the insurance company. This makes an insurance broker very different to an authorized representative of an insurance company. An Authorised Representative of an insurance company acts on behalf of that insurance company they do not look after the best interests of the client.

In some circumstances an insurance broker may act on behalf of the insurance company. In those cases the broker must inform the client of the fact that they are operating on behalf of the insurance company.

Insurance Brokers must also subscribe to and are bound by the decisions of the Financial Ombudsman Services (FOS).

FOS is a service designed to resolve complaints and problems between clients and their broker. FOS is totally independent and its decisions are binding on the broker but not binding on the client. If the client is not happy with FOS’s decision they can opt to take matter to court.