FSA chief executive John Tiner ruled out mandatory commission disclosure in his speech at the first FSA Insurance Sector Conference last week.
Tiner hit back at senior Lloyd's figures, notably chief executive Nick Prettejohn, who had criticised the FSA for not requiring brokers to disclose all commissions.
Tiner said: "It would not make sense to bend like a reed in the wind and change our policy in response to calls from some quarters for us to do so, no matter how loud or authoritative the voices."
He said that in tackling the problem of managing conflicts of interest, as highlighted by Eliot Spitzer's inquiry in New York, "mandating disclosure would not strike at the heart of [that] problem".
"Full disclosure would not be a panacea, nor provide a safe harbour from the need to manage conflicts: they would still be present and they would still have to be managed."
He emphasised that the management of conflicts of interest was the responsibility of firms and not the regulator. "Our responsibility is to set the principles and assess compliance with our principles," he said.
Tiner encouraged the insurance market to collaborate in developing a solution for managing conflicts.
"We will support any efforts the industry makes to solve its perceived problems. The market is welcome to use this opportunity and collaborate to agree a code of conduct on disclosure."