Airmic has objected to national brokers’ plans to introduce additional commissions on fee business across the market.

But the association acknowledged that transparency in broker fees was a more important issue, and would not be opposing the charge.

In recent weeks Willis and Marsh have said they will begin levying a 2.5% commission on fee-based business. This brings them in line with Aon which has had this model in place since 2001.

The other major brokers are expected to follow suit in the coming months.

Airmic technical director Paul Hopkin said: “We don’t like commissions that have a direct relationship with premiums.

“If the broker charged a fee to his client, there would be recoverable VAT added to that fee.

“If it’s rolled in with premiums it has insurance premium tax (IPT) added.”

But he added: “We are not going to oppose the fees. We prefer brokers to charge a fee to their clients, but transparency is much more important.

“The FSA is looking at whether brokerage distorts the market and introduces inefficiency into the market.

“It will launch an investigation next year.”

The European Commission recently highlighted the issue of broker commission transparency in a report that called on the insurance industry to justify its business practices under competition law.