MelvilleJessupWeaver (MJW) prepared a $200,000 report for the Financial Services Council which claimed that high upfront commissions were creating poor outcomes for consumers.

It called for limits to be imposed.

After the report was released, insurers that distribute via third-party advisers - AIA, Partners Life, Asteron life and Fidelity Life - resigned from the Financial Services Council.

Its chief executive has since been made redundant and the association is reassessing its future direction.

MJW actuary David Chamberlain said the reaction was not what had been expected.

"We did not anticipate the actions that followed publishing of the report."

But he said it seemed likely that New Zealand would follow Australia's lead to regulate insurance commissions.

Australia's new laws, which will take effect on 1 July 2016, include a three-year phase-down of upfront commissions paid to advisers to a maximum of 60% from 1 July 2018, together with the introduction of a maximum rate for ongoing commissions of 20 per cent; and the introduction of a two-year commission clawback period, which will claw back 100% of a commission in the first year and 60% of a commission in the second year should a policy lapse.

"You have to suspect that they will flow here," Chamberlain said. "How it would be implemented is another question. But I expect within the next year or two we will see some movement in that direction."

ASIC is due to report back on the success of the changes in 2018 and Chamberlain said by that point New Zealand would probably have made some changes, too.