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Issue 16 - January 2014

An update from the Code team


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 Code of Banking Practice, the Customer Owned Banking Code of Practice, the General Insurance Code of Practice and the Insurance Broker’s Code of Practice. There are 694 financial services providers that subscribe to these four Codes.

Code monitoring activities in the banking, customer owned 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.

General Insurance Code of Practice

The annual report for the General Insurance Code of Practice contains aggregated industry data and consolidated analysis on code compliance. The Code team is currently preparing this report for the 2012-2013 reporting period, and we expect it to be published by April 2014.

Copies of annual reports from previous years can be found here.

Code of Banking Practice

The annual report for the Code Compliance Monitoring Committee (Banks) was published on 13 December. The annual report provides a summary of code-subscribing banks’ compliance with the 2004 Code of Banking Practice for the 15 month period 1 April 2012 to 30 June 2013.

The annual report shows that:

  • the banks self-reported 9,403 breaches of their code obligations, up 30.4% from 2011-12
  • there were 12 significant breaches of code obligations self-reported by the banks
  • 2,573 breaches of the Code were reported against Key Commitments and General Obligations, up 2.5% from 2011-12
  • 898,000 consumer disputes were dealt with by the banks, of which 88% were resolved internally by the banks within five days
  • 270,000 requests for financial difficulty assistance were received by the banks, up 5.3% on the previous year
  • two Own Motion Inquiries were undertaken (on Guarantees and Chargebacks)
  • 46 new Investigations were conducted, and an aggregated 84 alleged code breaches were considered
  • 29 Investigations were closed, including five by Determination or Recommendation, where 12 breaches of the Code were identified
  • 75 requests for information about the Code were handled by the FOS Code team
  • there were 4,019 individual visitors to the Committee’s website (
  • 14 publications were released and 36 stakeholder engagements undertaken during the reporting period
  • 29 training sessions were conducted for consumers, external dispute resolution staff and banks.

A copy of the 2012-2013 Annual Report can be found here.

On 1 December 2013 Suncorp Bank became the first bank to formally adopt the revised 2013 Code of Banking Practice.

All of the other banks currently subscribing to the 2004 Code have confirmed their commitment to adopt the revised 2013 Code by the 1 February 2014 commencement date. A list of subscribers to the revised 2013 Code can be found here.

Customer Owned Banking Code of Practice

The Code Compliance Committee (Customer Owned Banking) published its 2012-2013 Annual Report on 4 December 2013.

The report shows that:

  • the increase in the number of reported breaches (152% increase to 917) was mostly due to an intensive code breach monitoring program established at one institution where 350 breaches were identified
  • non-compliance with the Code’s obligations by code subscribers during the reporting year related primarily to training, chargebacks, account access and account suitability
  • there were 16 significant breaches identified where remedial actions were all completed or underway
  • code subscribers reported 14,393 customer complaints (a 38% increase), identified through internal dispute resolution processes
  • 74% of these complaints were resolved in favour of the customer or by mutual agreement
  • 309 breaches of the Code were identified from internal analysis of customer complaints.

The Committee was pleased to acknowledge initiatives introduced by institutions to improve Code awareness and compliance during the reporting year.

A copy of the report can be found here.

In 2013 an independent review of the Code concluded that the Code was working effectively and the Committee was viewed by stakeholders as a suitable oversight body. Recommended changes to the Code became effective from 1 January 2014.

A copy of the revised 2014 Code can be found here.

Insurance Brokers Code of Practice

The 2006 Insurance Brokers Code of Practice has recently been revised to reflect changes that have occurred within the industry, and the revised Code became effective on 1 January 2014. The National Insurance Brokers Association (NIBA) has established a new independent Code Compliance Committee to oversee the administration of the Code and monitor compliance with its obligations. The FOS Code team will provide secretariat and administrative services to the Committee.

The service standards in the revised 2014 Code cover:

  • compliance with the law
  • managing conflicts of interest
  • advising who the member acts for
  • advising of the scope of the member’s services
  • acting diligently, fairly and with integrity
  • the disclosure of remuneration
  • appropriate money handling
  • acting with competence
  • responding to catastrophes
  • the effective handling of disputes
  • the promotion of the Code
  • bringing the insurance broking profession into disrepute.

The revised Code can be viewed here on the NIBA website. The FOS Code team encourages all code members to ensure they have effective code monitoring and reporting systems in place to meet their revised obligations.