The suggestion is believed to be part of the Melville Jessup Weaver report into the insurance industry, being prepared for the Financial Services Council.

The report is rumoured to say that the bank distribution model is more profitable than the life insurance companies' model that pays commission. Bank staff usually receive a salary with bonuses for sales.

Many insurers pay up to 200% upfront commission to advisers.

Some offer less, such as Fidelity, which pays a maximum of 100% upfront plus renewal of 6% and 4% of ongoing service commission.

The MJW report is also believed to argue that the fire and general insurance model, with much lower commissions, delivers a better deal for consumers.

It also raises questions about the sustainability of commissions.

AIA chief executive Natalie Cameron said: "Different distribution models will have different margins. Banks benefit from having a large existing client base to market insurance to, and don't have the acquisition costs of some other channels but that does not necessarily mean commissions are too high in other channels, rather banks have synergies they can exploit.

"There are also benefits of advice given in non-bank channels and there is most certainly a place for advice outside bancassurance."

AIA offers advisers 200% upfront for insurance policies of more than $100,000 and then 5% renewal in the policy's first two years, 7.5% in the third and fourth years and 10% a year from the fifth year on.