The Financial Markets Authority last week issued its report on soft commissions, which found that insurers spent $34 million over two years on soft commissions, and half of that was on trips.

There was a pattern of advisers selling more policies in the period before a qualification period for a trip ended.

Faafoi said he was pleased to see some companies changing their behaviour - AMP has axed international trips. "I encourage others to follow suit," Faafoi said.

He said he wanted the Financial Services Legislation Amendment Bill (FSLAB) to ensure anyone giving financial advice would put the consumer’s interests ahead of their own, and comply with a code of conduct.

“I want to see FSLAB improving the disclosure obligations of those offering financial advice so that consumers can make informed financial decisions. Part of the work on improving disclosure will look at addressing soft commissions.”

An issues paper was launched yesterday as part of the review of the insurance contracts law in New Zealand. The FMA had indicated soft commission structures could be addressed as part of that review.

The paper made it clear that adviser incentives are part of its remit.

“The review is being scoped relatively tightly to ensure that progress can be made on the issues that have already been identified,” the paper said.

One of those areas is the conduct of insurers and intermediaries.

“The conduct of insurers and associated intermediaries involved in selling insurance can significantly influence the outcomes for policyholders during the lifecycle of a contract - involving all stages of the contract, from choosing a provider, claims handling, dispute resolution, settlement of a claim and through to the point at which all obligations under the contract have been satisfied. We are therefore also considering any issues relating to the broader question of insurers’ conduct.”

The paper said there had been reports of conduct issues relating to advice, including pressure sales tactics, selling products that are unsuitable for the customer in question and deliberate churn of insurance policies.

It pointed to the Australian experience of high-pressure sales, and Australian and British examples of misselling. It wanted feedback from submitters on whether that was happening here.

“Because there are gaps in regulatory oversight over insurers’ conduct, there are currently limitations in our evidence base from which to identify and assess the issues in New Zealand. Our inquiry into insurers’ conduct is largely driven by the findings of the IMF and the gaps in New Zealand’s regulation of insurers when compared to the International Association of Insurance Supervisors principles.”

Submissions are open until July 13.