Taking up an audit insurance is a convenient approach to mitigate the additional expenses on audit fee payable to Australian Tax Office (ATO). But, you find there are several audit insurance companies each offering insurance policies with varying features. In such a situation, you may consult audit insurance brokers who would guide you in choosing a suitable insurance company. In an article entitled ‘Facts and figures – Insurance Brokers’, Billy Bennett points out that in Australia, more than half of the insurance businesses go through the insurance brokers.
The role of insurance brokers:
Basically, insurance brokers are agents who market policies from different insurance companies. The brokers market various types of policies like life insurance, accident insurance, tax audit insurance and so on. The brokers have a thorough knowledge of the features of insurance policies from different insurance companies. They guide you in taking up a suitable policy depending on your specific requirement. However, there are some insurance brokers who are specialized in a particular type of policy, like, for example, audit insurance policy or life insurance policy and so on.
Registration of brokers;
According to the law prevailing in Australia, the audit insurance brokers are required to register themselves under the Financial Services Reform Act 2001. Normally, in Australia every insurance broker is a member of the National Insurance Brokers Association of Australia (NIBA). This Association acts as a nodal agency to regulate the activities of its member brokers. In fact, the NIBA has drafted certain codes of conduct or guidelines to ensure fair business practices from every member broker.
Scrutiny of ASIC:
Further, every insurance broker is required to conduct business in a fair manner and with due regard to the ethics of business. The activities of the audit insurance brokers also come under the scrutiny of Australian Securities and Investment Commission (ASIC). As a matter of fact, ASIC is regarded as the sole commonwealth regulator for consumer protection.
Approach the insurance company directly:
There is no law which prescribes that insurance policies should be taken only through an insurance broker. In fact, you can approach any insurance company directly and choose insurance on your own. But, choosing the insurance policy availing the expertise of an insurance broker has certain advantages.
Compare different policies:
As a layman to the world of insurance business, you will be guided only by what the insurance company representative tells you about a given policy. You will not have any opportunity to compare the given policy with similar policies from other insurance companies. In the absence of such comparison, you would fail to make a proper evaluation of the pros and cons of different policies.
Guidance from the broker:
But, the insurance broker will ascertain your needs and present to you policies from different insurance companies that suit your requirement. He will explain to you the salient features of each of these policies. Thereby, you will get a comprehensive view of varieties of insurance policies. Added to these, the insurance broker will guide you suitably to choose a policy that could offer you greater benefits. Normally, the insurance brokers will not collect any commission from you because it is paid by the insurance company.