Australia's New Life Insurance Framework is looming, which introduces new rules for commissions including maximum total upfront commission of 60% from 2018 and maximum ongoing commission of 20% as of this year.  The changes came in response to the country’s Trowbridge Report, which suggested reform was needed.

There is also a two-year clawback period introduced and advisers have to offer prominent upfront statements about commissions.

In an online poll run by Australian site riskinfo, a third of insurance advisers said they would not be able to operate their advice businesses successfully under the remuneration proposals the framework sets out.

Another 13% were not sure.

Just over 40% said they could, but did not support the proposals.

New Zealand’s insurance advisers are also set for a shake-up, but not to commission levels yet.

When the new Financial Advisers Act comes into force, it is likely to mean higher competence, disclosure and ethical standards for the country’s insurance advisers.

The Financial Markets Authority has indicated that it hopes that will deal with any questions about the level of upfront commissions being paid and the impact that could be having on concerns such as the level of replacement business.

It is also conducting an investigation into advisers with high levels of replacement business.

It would look at commission restrictions further down the line as part of possible changes if those efforts were not enough.

Auckland insurance adviser Katrina Church said many insurance businesses in New Zealand would struggle under the Australian framework, too.

She said if New Zealand were to follow suit, it would result in it being harder for consumers to access advice and insurers would have to step into more of a sales role.

Advisers would no longer be able to offer any pro bono work, she said.

Church said it was behaviour that needed to be managed, not remuneration.