At its core, informed consent is about transparency. It means clients are made aware – clearly and upfront – of the commission a broker may receive from the insurer for arranging cover, and what services are provided in return. Consent must be given before a policy can be placed, renewed or altered if personal advice is being provided and commission is being received.
Whether you’re arranging general insurance for yourself or your business, or involved in strata as a property owner, strata manager, committee member or part of an Owners Corporation, the Whitbread team is here to guide you through the informed consent process and answer any questions.
For many years, brokers have received commissions from insurers as payment for services, including policy placement, advice and ongoing support. The informed consent process doesn’t introduce new costs – commissions are built into the premium and paid by the insurer – but it does require that this arrangement is disclosed and agreed to by the client.
Informed consent refers to a person’s voluntary agreement allowing an insurance broker to obtain quotations that include commission as part of the premium. It requires that the client:
Not necessarily. Insurance companies have been paying commission to brokers for over 100 years. The only difference now is that brokers require the consent of the client in order for the insurance company to pay the broker commission.
Verbal consent is acceptable from the client, however the formal consent provided must eventually be confirmed in writing.
No. Informed consent must be reaffirmed when something material changes (for example, a change in commission or a change in insurer, etc).
Robust documentation should include:
The legislation is very clear; without consent from the client then no commission can be paid to the broker. The Whitbread approach is to provide the client with alternative options in relation to the provision of advice. We appreciate that these changes may prompt new questions, so our staff are happy to guide you through the process.
In most cases, yes. Signing or providing electronic confirmation ensures there’s a record that you:
If you’re unsure or feel pressured, please contact us on the informed consent hotline for further advice.
Before commission is paid
Yes. A client can revoke consent if they have not yet proceeded with the product or the advice has not yet been acted upon.
After commission is paid
Generally, no. Once the broker has lawfully earned the commission through proper disclosure and informed consent, the client usually cannot retroactively withdraw that consent.
Giving consent means that you understand and accept that the broker will receive commission from the insurer. You are not required to accept any recommendation. You can seek a second opinion, defer your decision, or ask us for more information.
If you believe you gave consent without understanding the full picture, you can:
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