Norwich Union (NU) warned brokers that incentive schemes such as up-front commissions and acquisition loan deals could break post-Spitzer trading rules.

The guidance, due to be released to brokers over the next few months, comes on the back of a survey by ICM which showed that a third of brokers still have concerns about insurers offering incentives in the FSA environment.

NU director of intermediary business Greg Gladwell said: "We feel that brokers need some guidance on risk analysis post-Spitzer, ranging from what NU considers to be higher risk activities to those at the other end of the scale."

The sort of activities NU will be highlighting as higher risk are increased up-front commissions, where brokers receive commissions up-front after guaranteeing certain volumes of business, and loans for acquisitions.

Early payment incentives and net rates are lower risk, according to NU.

The moves comes at a time when brokers are reviewing their arrangement with insurers to ensure they do not breach FSA rules on inducements.

One large regional broker who asked not to be identified said his company would be reducing its use volume overriders as he thought they would be more difficult to justify under FSA regulations. In contrast profit share agreements were easier to justify, he said.

The ICM survey of over 300 brokers showed that 42% of businesses said that the right incentive can potentially increase the amount of business placed with an insurer by up to 10%.

However brokers believed that incentives have a relatively low impact in determining where business is placed.

Around 10% said incentives are important compared to 90% who highlighted level of service.