What is a broker file audit?
A broker file audit is a review of a client file to check that the broker followed the law, the Insurance Brokers Code and the firm’s own procedures, from first contact to renewal or claim. It is the main way a licensee shows it supervises its representatives.
A good audit does three things:
• It checks what actually happened on the file, not what the policy says should happen.
• It backs every pass and fail with a specific document or client interaction.
• It gives the same answer whoever runs it.
This guide covers why audits matter, what they should cover, how to make them objective, and where technology helps. Watch the full session below.
[Recording embed and transcript]
How do most brokers audit files today?
Most brokers audit a small manual sample and review 0 to 5% of their files each month. In a poll of brokers in October 2026:
How do you audit client files today? | Share of brokers |
A small manual sample | 55% |
A risk-based manual sample | 33% |
Partly automated | 11% |
Most now have an in-house compliance or risk manager running these reviews. The limit is time: a manual review of one file takes hours, so most files are never checked.
Why do insurance brokers need file audits?
Brokers need file audits because the law requires them to supervise their representatives and keep evidence that they did. Policies, procedures and training describe how the business should work. A file audit is the only control that shows whether it does.
Three sources set the obligation:
• The Corporations Act requires a licensee to take reasonable steps to make sure its representatives comply with the financial services laws. Representatives include employees and anyone acting on the licensee’s behalf, not only authorised representatives.
• ASIC’s guidance (RG 104) expects licensees to monitor and supervise their representatives, and to keep evidence of it. Training alone is not enough.
• The Insurance Brokers Code requires brokers to show each year how they, and everyone acting for them, comply with it.
A policy describing what should happen is not evidence. An audited file is.
What do audits catch that policies miss?
Audits catch the gap between process and practice. Three common examples:
• Late renewals. Brokers reported more than 2,000 breaches of the Code’s 14-day renewal notice rule in 2025, even though most start renewals weeks early.
• Advice the client didn’t understand. Disclosures can go out on time and still not be understood or properly agreed to.
• Complaints left in the inbox. A client can say they are unhappy in an email, sometimes more than once, and it never reaches the complaints register.
What makes a good file audit? Six principles
A good broker file audit rests on six principles: a clear framework, evidence for every finding, access to the full file, a disciplined log, consistent results and follow-through.
1. A clear framework. Decide how a broker shows they complied with each requirement, not just which topics to cover. A framework is only as good as what comes out of it.
2. Evidence for every finding. Every pass and every fail points to a specific document or client interaction. A judgment with nothing behind it is an opinion.
3. Access to the full file. Emails, call notes, quotes, FSGs and renewal documents often sit in several systems. The audit needs all of them.
4. A disciplined log. Record audits in a structured way so you can filter by person or period and see whether things improve.
5. Consistent results. Two auditors reviewing the same file should reach the same answer. The framework decides, not personal opinion.
6. Follow-through. Every finding has a fix, an owner, a reassessment and a record that it improved.
What should a broker file audit cover?
A broker file audit should cover the whole life of the file, from classifying the client to claims handling. Curium’s framework does this in 10 sections, 37 checks and 113 separate tests:
1. Classification and scope
2. Engagement and disclosure
3. Needs analysis, advice and recommendation
4. Market research and placement
5. Instructions, binding and money handling
6. Renewals
7. Midterm changes
8. Cancellations
9. Claims handling
10. Whole-of-file conduct
Each check is tested against the financial services laws, the Insurance Brokers Code and the broker’s own procedures.
Which checks apply to a file?
Not every check applies to every file. Six variables decide which ones do:
• retail or wholesale client
• personal or general advice
• placed under a binder or not
• foreign insurer or not
• premium funded or not
• new business or renewal
A framework that ignores this breaks its own scoring. In one framework we reviewed, around 40% of checks didn’t apply to a typical file, so most files could never score above 60%.
If it’s not on the file, it didn’t happen
An audit can only test what is filed. Build filing into everyday work, even across several systems, rather than chasing missing emails at audit time.
How do you make a file audit objective?
You make a file audit objective by breaking each question into facts that can be evidenced, so that a person only makes the final call. Asked what they look for, experienced auditors often say “I’ll know it when I see it.” That is why two auditors can reach different answers on the same file.
Audit questions sit on a line from fact to judgment:
Type of question | Example | Can it be automated? |
Fact | Was the FSG given, and before or after the advice? | Yes. It’s a yes or no. |
In between | Was the retail or wholesale test met? Were the changes at renewal explained? | Partly, with careful design |
Judgment | Did the advice fit the client’s needs? | No. A person decides, using the evidence. |
To turn a question into evidence:
1. Start with the obligation. The law or an ASIC guide almost always says what is required.
2. Work out the purpose behind it.
3. Break it into steps, and decide what evidence proves each one.
Example: a complaint. A client emails to say they are unhappy. The email proves the complaint was made. To prove it was handled, the file needs an acknowledgment, a response and an entry in the complaints register.
About 98% of broker activity can be broken down this way. A person still makes the final call, on the full evidence, and the reasoning stays on record if they leave. Evidence is what separates a judgment from an opinion.
What does an automated file audit look like?
An automated file audit reads every document on the file, tests it against each check, and shows the evidence behind every pass and fail for a person to confirm. Here’s how it works in Curium, shown on a sample file built from mock data.
1. Pick a versioned framework. Each audit runs on a set template with its 37 checks, split into fact-gathering steps with pass and fail examples built in. Versioning shows which template each audit used.
2. Load the whole file. Drag in the client file. Attachments are pulled out of emails, with the link to the original email kept, so you know when each document was sent and to whom. Linked FSGs are opened and saved, which proves the right version could be read. PDFs, images, emails and spreadsheets are all read.
3. Classify once. Decisions such as “retail client” are made at the start and carried through every later check, so no step contradicts another.
4. Review the findings. Every result links to the documents behind it. The auditor can override any result and add reasons, and every change is kept in the audit trail.
5. Close the loop. A failed check becomes an incident or complaint in one click, pre-filled and linked back to the audit.
What can an automated audit find?
Three findings from the sample file:
Check | Finding |
Duty of disclosure | The right duty was explained, but the day after the fact-find. Right duty, wrong timing. |
Best interests | The proposal said a granny flat was let on Airbnb. The quote excluded cover when the home is let to paying guests, and no written warning to the client was on file. |
Quote against policy | The client was quoted a $500 excess but bound at $2,500. They then emailed to say they were unhappy, which was flagged as a complaint. |
Results can be exported as a PDF, or pulled into Claude or ChatGPT to build a report in your own format: failed checks by section, the top three findings, what went well and next steps.
Can AI audit broker files?
AI can gather and test the evidence on a broker file faster and more consistently than a person, but it should not make the final judgment. The licensee stays responsible for the outcome.
AI is good at | AI can’t |
Reading every document, email and file | Make the final judgment on a file |
Applying the same logic to every file | Fill in what’s missing from the file (and neither can a person) |
Testing at a level of detail no manual audit reaches: 113 tests across 37 checks | Write the procedures that should have been in place |
Spotting patterns across thousands of files | Act for the licensee or put things right. ASIC is clear that the licensee owns the outcome. |
Is a chatbot summary an audit?
No. A summary from a general AI tool has no evidence, no traceability and nothing a person can go back to and re-judge.
If you use AI for audits, set it up to find facts, not to give opinions. Ask “is it on the file or not?”, not “is this good advice?”. That design stops it guessing, and keeps the judgment with a person.
Frequently asked questions
What is a broker file audit? A review of a client file to check the broker followed the law, the Insurance Brokers Code and the firm’s own procedures. It is how a licensee evidences supervision of its representatives.
Are insurance brokers required to audit files? The law doesn’t name file audits, but it requires licensees to take reasonable steps to supervise representatives, and ASIC expects evidence of monitoring. File audits are the most direct way to provide it.
How many files should a broker audit? There is no set number. Most brokers review 0 to 5% of files a month because manual review is slow. Automation makes it practical to review far more.
How long does a manual file audit take? Usually two to three and a half hours per file, depending on its complexity.
What should a broker file audit check? The whole file: classification and scope, disclosure, needs and advice, placement, binding and money handling, renewals, midterm changes, cancellations, claims and overall conduct.
Can AI replace a compliance auditor? No. AI can gather and test the evidence, but a person makes the final judgment and the licensee owns the outcome.
Key points
• A file audit is the only control that shows what your people actually do.
• Apply only the checks that fit the file, or the scoring breaks.
• Back every pass and fail with evidence, and leave only the final call to a person.
• Use technology to gather and test; keep judgment and follow-through with people.
See it on your own files
Curium will audit up to 20 of your files against the full framework in 2 to 5 days. You get an extensive report, the full data set, and pre-filled breach and complaints registers.
Start the audit now
Watch the Webinar Recording
Want to explore what effective broker file audits look like in practice? Watch our webinar recording, where Curium’s Tetiana George and Jean-Luc Crowther discuss how to design evidence-based audits, reduce subjectivity, and use technology to improve efficiency while maintaining human oversight. Watch here.
Author:
Tetiana George, CEO of Curium, Co-Chair of Insurtech Australia and member of ASIC Digital Finance Advisory Committee. LinkedIn Profile.