In the public discourse about strata insurance commissions that has followed The Strata Trap story by the ABC, insurance brokers have fared surprisingly well. Commission paid by an insurer it seems is okay for them because, well, that’s how it’s done. They also haven’t been too concerned (until recently) about who gets what disclosure. In fact, no one has really been sure who they act for with brokers treating the strata manager more like the client than the strata scheme paying the bill. 

These murky arrangements have been allowed to continue despite the fact that they too work for strata entities and, like strata managers, they too owe fiduciary duties to the strata entities. 

This week a LinkedIn post by a new entrant to the broking game helpfully set out five questions strata schemes should be asking their brokers. And in a further development this week an announcement of a new code of conduct for brokers beginning 1 January 2027 means getting some of these answers will be a bit easier.

Read: Industry-regulated disclosure and pricing? The solution or the problem?

Which questions get easier to answer?

The questions about the broker get easier to answer. For the first time, the Code makes the owners corporation the client for disclosure, not the strata manager who arranged the introduction (clause 7.1). If the broker pays any part of its remuneration — commission, fee, rebate or other benefit — to the strata manager, it must name who receives it and how much (clause 7.3). Any owner can ask what the broker earns and get the figure in dollars. From 2028, renewal notice doubles to 28 days, which buys a committee time to actually ask. Three of the five questions now have a rule behind them.

Why does strata get special treatment?

Strata gets special treatment because this is where trust has worn thinnest. NIBA was asked to extend remuneration disclosure to all individual and small-business clients and declined, with two-thirds of members preferring the status quo. Strata was the exception it carved in. The profession is telling owners, in effect, that their insurance is the part of the market it most needed to cleanup.

Which questions does the Code leave open?

The Code leaves the hardest questions open. It binds brokers, not strata managers, so the strata manager’s own insurance fee sits outside it entirely, and a committee still has to pursue that separately. It requires each payment to be disclosed but stops short of requiring one combined figure, so “how does the total compare with last year” is still yours to assemble. And the strata rules carry a twelve-month transition, so they do not bite until January 2028. The 2027 renewal season runs on the old rules.

Read: Death by Obfuscation – The Two Faces of Transparency in Strata

What should a committee do at renewal?

At renewal, a committee should use those five questions as its checklist and the new Code as its leverage. Ask for the full cost of placing the insurance shown as last year against this year on the same basis. Ask who receives each payment and what it buys. A separate fee can mean a genuine saving; it can also be the same money wearing a new label. The Code hands committees a stronger right to ask and more of the broker’s cards on the table. The questions it leaves unanswered are the ones worth asking loudest.

Read: Why Strata’s ‘OldSchool’ Base Fees Are Suddenly the Pricing Model of the Future

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