Starting July 10, 2025, significant changes to Australian insurance regulations will take effect, introducing new commission consent requirements for general insurance brokers. These changes stem from the Quality of Advice Review and aim to enhance transparency in the insurance advisory process.

What Are the New Requirements?

Under the new legislation, insurance brokers who provide or are likely to provide personal advice to retail clients must obtain informed consent before receiving commission payments. This applies to general insurance, life insurance, and consumer credit insurance products.

The consent process requires brokers to disclose specific information to clients, including:

Name of the insurer (if known)
Commission rate as a percentage of the premium
Frequency of commission payments

This information must be presented in a “clear, concise and effective manner” to ensure clients have a genuine opportunity to make an informed decision.

How Does the Consent Process Work?

Clients can provide consent either verbally or in writing, but brokers must maintain a written record of all consent given. The Australian Securities and Investments Commission (ASIC) emphasises that information must be clearly identifiable and prominently displayed to help clients understand what they’re consenting to.

For renewals, consent doesn’t need to be sought again if:

The original consent included permission for subsequent renewals
The commission percentage remains within the previously agreed range

However, if commission rates increase beyond the disclosed range or payment frequency changes, new consent must be obtained.

Industry Response and Concerns

The National Insurance Brokers Association (NIBA) is providing support resources to help members prepare for these changes, including webinar series titled “In Practice: Informed Consent.” NIBA President Nick Cook acknowledges that informed consent “will require significant change in respect to broker workflows.”

Some brokers have expressed concerns about the additional administrative burden, particularly given current supply chain disruptions and processing delays in the industry. Others worry about client response times and the potential impact on retail insurance markets.

However, the legislation has supporters who view it as important consumer protection, with some brokers already operating under fee-for-service models finding minimal operational disruption.

Business Transfer Considerations

The legislation includes provisions for business transfers. If a brokerage is sold, existing client consent transfers to the new broker, provided commission arrangements remain within the terms originally consented to by clients.

Preparing for Implementation

With the July 2025 implementation date approaching, brokers have several months to:

Review current disclosure processes
Update client communication procedures
Implement systems for recording and managing consent
Train staff on new requirements

Where to Find More Information

For detailed guidance on the new requirements, brokers and clients can access:

ASIC’s updated Regulatory Guide 246 – Available on the ASIC website
ASIC Information Sheet – Provides practical guidance on the legislation
NIBA Support Resources – Including webinar series and member guidance
Treasury Laws Amendment Act – The full legislation text

The changes represent part of the first tranche of reforms from the Quality of Advice Review, with additional measures expected to be developed later this year.

For specific questions about how these changes may affect your insurance arrangements, we recommend consulting with your insurance broker or seeking professional advice.

This information is provided for general guidance only and should not be considered legal or professional advice. For specific circumstances, please consult with qualified professionals.

New Commission Consent Laws: What Insurance Brokers and Clients Need to Know