The Financial Planning Association (FPA) has come under fire over alleged kickbacks it will receive on its professional indemnity (PI) insurance scheme.

Last month insuranceNEWS.com.au reported Jardine Lloyd Thompson had won the tender to lead a new PI insurance service for members after PI cover became compulsory for planners on July 1.

Last week the Australian Financial Review revealed the FPA is set to receive a third of the 15% commission fee JLT will charge policyholders. It has resulted in calls for the payments to be returned to members.

FPA CEO Jo-Anne Bloch has defended the payment, saying the association has been “entirely transparent” in disclosing the commission.

In a letter to FPA members, Ms Bloch said the association makes “no apology for deriving income from the process, in the form of a commission”.

The FPA receives either a 3% or 5% commission depending on the size of the premium.

“Importantly, this commission is paid from the broker’s commission and not from the policy pricing to members,” she said. “Any income derived is applied to the FPA’s ability to service our members because we are a not-for-profit association.

Ms Bloch added members are free to choose their PI provider.