Strata Broking Breaches Exposed: Compliance Review Uncovers Conflicts, Hidden Commissions and 'Unmanageable' Risks

A compliance review into strata insurance broking has uncovered serious breaches, including conflicts of interest, poor remuneration disclosure, and inadequate oversight of authorised representatives. The Silicon Review examines how the Insurance Brokers Code Compliance Committee's investigation exposes deep flaws in a $2 billion market where consumer advocates say trust has been eroded.

The strata insurance market is under the microscope. And what investigators are finding is not pretty.

A "targeted" compliance review by the Insurance Brokers Code Compliance Committee has exposed serious breaches across four major strata insurance brokers. The investigation, focused on remuneration disclosure, conflict of interest management, and oversight of authorised representatives, was prompted by concerns raised directly with the committee and issues exposed in media reporting .

The strata insurance market in Australia is worth an estimated $2 billion. It is also a market where conflicts of interest have become entrenched. Consumer advocates point to common ownership of underwriting agencies and brokers, and complex business structures that obscure insurance earnings.

"The review aims to identify conduct falling short of code expectations, “a committee spokesperson told, noting that it is looking at how brokers ensure their agents are complying with disclosure and conflict of interest obligations.

The breaches come as the National Insurance Brokers Association faces mounting pressure to strengthen the Insurance Brokers Code of Practice. An independent review completed in December 2025 produced 14 recommendations to update and strengthen the framework. Consumer groups including the Australian Consumers Insurance Lobby, the Owners Corporation Network of Australia, and the Unit Owners Association of Queensland are now pushing for explicit prohibitions on conflicted remuneration arrangements.

"There has been extensive scrutiny of strata insurance practices, and the issues are well understood," said UOAQ president Mike Murray. "For the industry to fail to address them through its own code would be a significant missed opportunity and would further erode consumer confidence."

The central issue is clear: some brokers are paying or sharing financial benefits with parties who owe fiduciary duties to strata owners such as strata managers. The Owners Corporation Network has long argued that strata managers' receipt of insurance commissions is fundamentally incompatible with their fiduciary duties and cannot be managed through disclosure.

"You cannot 'manage' or 'disclose' your way out of a conflict that depends on breaching fiduciary duty, “said OCN joint managing director David Glover. "Where these arrangements exist, the only appropriate response is to prohibit them."

A Strata Knowledge report commissioned with NSW Fair Trading has called for an "outright ban" on commissions for both brokers and managing agents, arguing that disclosure has become "a shield for unethical practices rather than a protective mechanism."  NIBA has pushed back, warning a ban could create a barrier to accessing professional advice.

The committee's annual breach report earlier noted that in 2024, breaches of disclosure obligations "impacted more clients than any other category, underscoring the importance of strong oversight and accountability across all parts of a broker's operations."

Here is the question The Silicon Review raises. When the Insurance Brokers Code Compliance Committee opens a formal investigation into four major brokers, consumer advocates are calling for a commission ban, and the code's own annual report flags disclosure breaches as the most impactful category why is the industry still arguing that self-regulation is enough?

FAQ:

Q: What did the compliance review into strata broking find?
A: The review identified serious breaches across four brokers, including poor remuneration disclosure, conflicts of interest, and inadequate oversight of authorised representatives.

Q: What is the Insurance Brokers Code of Practice?
A: The Insurance Brokers Code of Practice is a self-regulatory code that applies to all NIBA member firms, setting expectations on conflicts management, disclosure of remuneration, and client service.

Q: Who monitors compliance with the Insurance Brokers Code of Practice?
A: Compliance is monitored by the Insurance Brokers Code Compliance Committee, which conducts investigations and publishes annual breach reports.

Q: What is consumer advocates calling for in strata insurance?
A: Consumer groups are calling for explicit prohibitions on conflicted remuneration arrangements, arguing that a fiduciary cannot receive financial benefits that conflict with their duty to clients.

Q: What is NIBA's position on strata commission reform?
A: NIBA supports improving transparency and accountability but warns that banning commissions could reduce access to professional advice for strata communities.