Insurers will be charged a 1% flat rate for services carried out on their behalf by broker Heath Lambert.

The Broker Insurer Services Commission (BISC) model will replace the contingent commission payments at Heath Lambert, which brokers dropped in November.

Health Lambert is the first major broker to make a public announcement on fee charges since the New York attorney general Eliot Spitzer launched an investigation into the charges.

The broker said its move would set the "benchmark" for the broking sector.

Group chief executive Adrian Colosso described the fee as "equitable, transparent, and at 1%, not excessive".

Allianz Cornhill general manager Chris Hanks welcomed the move. He said an evolving business environment had prompted some positive changes in the broking sector.

Hanks said he was "very interested and encouraged" by the low fee. "This is a simpler model which is easier for everybody to understand."

But claims from Heath Lambert that other large brokers could charge up to 5% commission for client services have been disputed as "ludicrous".

"It is not possible to say how much is going to be charged, but it will be no way near that figure," a source said.