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An introduction to Code Compliance and Monitoring


The Code Compliance and Monitoring team is a separate business unit of FOS. Our purpose is to assist the independent administration and monitoring of compliance with industry Codes of Practice in the financial services sector.

We assist in monitoring the Banking Code of Practice, the Mutual Banking Code of Practice, the General Insurance Code of Practice and the Insurance Broker’s Code of Practice. There are 704 financial services providers that subscribe to these four Codes: 95 mutual banks and credit unions, 444 insurance brokers, 18 banks and 147 general insurers, cover holders and claims administrators. 

A Code of Practice sets standards of good industry practice for financial services providers to follow when dealing with people who are, or who may become, an individual or business customer. Each provider that subscribes to a Code has made a commitment to:

  • work to improve the standards of practice and service in their industry
  • promote informed decisions about their services, and
  • act fairly and reasonably in delivering those services.

Code monitoring activities in the banking, mutual banking and general insurance sectors are overseen by Code Compliance Committees which comprise an independent Chair, a consumer representative and an industry representative. These committees operate independently of the respective industries and have powers and functions to identify and address non-compliance with Code obligations. FOS provides secretariat services to each of these committees.

Code monitoring activities – return of Annual Compliance Statements

Between May and September 2012, all 704 Code subscribers were asked to complete an Annual Compliance Statement to report on the effectiveness and operation of their organisation’s Code monitoring frameworks during the 2011-2012 reporting year.  

We are now assessing the Annual Compliance Statements and will follow up any non-compliance issues that are identified. We will also analyse the data from each sector to identify any trends, patterns and emerging risks in code compliance, and will report this information to the relevant industry and stakeholders in the Annual Reports published for each Code between October 2012 and March 2013.

New Code Monitoring Framework – General Insurers

In July 2012 we implemented a new three-year Code compliance monitoring program for the General Insurance Code of Practice. Within that program, each of the 147 Code participants, including Lloyd’s Australia Ltd’s coverholders and claims administrators, will be required to certify their compliance with the Code by completing one desk top audit and two self assessment questionnaires over a three year cycle.

All general insurers should have received their calendar outlining when they will be subject to this code monitoring activity.

Mutual Banking Inquiry Report

The Code Compliance Committee (Mutual Banks) has recently released a report into an inquiry it conducted into mutuals’ compliance with their obligations to conduct Code training. The committee identified that while Code training is embedded in the learning and development programs of most mutuals, the content, method, frequency and monitoring of programs varies significantly depending on the size of the Mutual. In addition, the inquiry discovered that the supervision and monitoring conducted by mutuals to ensure that code obligations are met in practice require improvement

Report on Claims Handling Standards – General Insurance

  • The Operation of the General Insurance Claims Handling Standards during the Queensland Floods – published at

This survey reviewed the operation of the claims handling standards in the General Insurance Code of Practice both during and after the Queensland Floods in 2010/11. A range of recommendations were made for the consideration of the independent reviewer of the Code, including the observation that fairness, transparency and accountability are critical to an effective claims handling process.

In addition, we noted that communication models within insurance companies during natural disasters and catastrophes need to ensure active engagement with customers about how claims will be handled, the timeframes within which this will occur, and the roles and responsibilities of both parties in that process. Ineffective management of customer/insurer communication while handling claims can also lead to perceptions of unfairness and lack of transparency of process.

Code Compliance Investigations Activity

We investigated 173 allegations that a financial services provider had breached a Code obligation. Our investigations confirmed 95 breaches across the four Codes, including three significant breaches. 

Contact Us

If you would like to discuss or obtain any information about the Codes of Practice monitored by the Code team, please contact us on