Regulatory Overload is Costing Clients, NIBA Calls for Urgent Reform

The National Insurance Brokers Association (NIBA) is calling for regulatory simplification to be treated as a priority, warning that rising compliance complexity is placing increasing pressure on insurance brokers and diverting time and resources away from clients.

This issue is not confined to financial services. It is part of a broader national conversation around productivity, competitiveness and how regulation can better support professional service businesses to deliver value.

NIBA's landmark Ready or Reacting? Shaping the Future of the Broking Profession report identifies regulatory demands as one of the biggest disruptors facing the insurance broking profession over the next decade. The findings are stark: 86% of brokers anticipate regulatory demands will significantly impact the profession, yet only 62% feel prepared for this shift. That gap between anticipated impact and current preparedness is not an abstract risk. It is compliance pressure accumulating in real time, at the direct expense of client service.

The scale of that pressure is significant. According to the Insurance Council of Australia’s recent The Cost of Regulatory Burden report, the general insurance sector currently operates with more than 30,000 discrete obligations drawn from 300 regulatory instruments, enforced by 25 regulators. The cumulative effect on brokers, particularly smaller and boutique firms, is a compliance burden that was never designed with general insurance broking in mind.

NIBA CEO Richard Klipin said the profession supports regulation that protects clients and builds confidence in the financial system, but the current framework is becoming increasingly difficult to navigate.

"Insurance brokers support sensible regulation and strong consumer protections, but the system is becoming too complex, too duplicative and too resource intensive. When compliance settings become harder to interpret and more time-consuming to meet, brokers have less time to focus on what matters most, which is helping clients understand risk, secure appropriate cover and navigate claims," Mr Klipin said.

NIBA's concerns are reinforced by broader business sentiment. The Australian Chamber of Commerce and Industry's 2025 report, Path to Prosperity: Slashing Red Tape to Unlock a Brighter Future, found business-related compliance costs have risen by at least $5.5 billion over the past five financial years, with red tape placing a significant handbrake on productivity, investment and innovation.

That report also highlights how small businesses are disproportionately affected by regulatory burden — a finding that resonates strongly across the broking profession. For many firms, especially those serving local communities and small business clients, time spent on inefficient compliance processes is time taken away from providing advice and service.

Momentum for reform has also been building at a policy level. In a recent address at the Sydney Institute, Assistant Treasurer and the Minister for Financial Services, the Hon Daniel Mulino MP made a case for what he called “better regulation” — regulation that fulfills its original policy objective and targets real risks while minimising complexity, red tape and uncertainty.

Regulation was also key theme of the three-day Economic Reform Roundtable held late last year, reflecting increasing recognition that regulatory simplification is central to lifting productivity and reducing friction across the economy. ASIC's recent REP 813: Regulatory Simplification report acknowledges concerns around duplication, inefficiency and compliance costs in financial services, and is an important signal that regulators understand the need for a more proportionate framework.

NIBA believes the alignment of industry research, business advocacy, regulatory attention and policy momentum creates an important opportunity for reform. Measures such as clearer guidance, simpler administrative processes and more streamlined regulatory settings can make a meaningful difference, while ensuring strong consumer outcomes.

"There is now a genuine opportunity to cut through complexity and build a regulatory environment that better supports both consumer protection and professional service delivery," said NIBA President Nick Cook.

NIBA looks forward to working with government, regulators and key industry stakeholders to help progress regulatory simplification as a practical reform agenda and ensure insurance brokers are strongly positioned to help Australian households and businesses manage risk with confidence.