Insurance broker commissions are unlikely to disappear soon, an industry expert says.

Finity Principal Geoff Atkins told insuranceNEWS.com.au that while commissions will face scrutiny during a 2022 review recommended by Commissioner Kenneth Hayne, he does not expect them to be banned.

“I don’t think [insurance broker] commissions will be prohibited or disappear,” he said.

“The things that might disappear are the over-riding, volume-based kickers – deals between insurers and brokers that are beyond the business placed.

“[In terms of basic commissions], I can’t see that any other business model makes sense.

“The commissions are disclosed, broadly level, and a good way of remunerating brokers for the work they do.

“Small businesses want someone on their side who can place their business and give reasonable advice. They don’t want to be haggling with their broker over the fee they need to pay.”

Labor has backed away from the Hayne-recommended fee-based system for mortgage brokers, proposing instead a fixed-rate commission structure.

But Mr Atkins says the insurance industry “should not read too much into this”, and the move is not necessarily an indication of the party’s approach to insurance brokers.

He believes the true impact of the Hayne royal commission will not be clear “for several years”, and the serious work will not start until after the upcoming federal election.

“Until then, it looks like it will just be competing promises. Some of the legislation is drafted but quite a bit is not and, as ever, much will depend on how recommendations are enacted and enforced. It will be several years before all the implications are understood.”

Mr Atkins says his “biggest frustration” is that general insurance has been “swept up” in changes aimed at other financial services.

The recommendations on hawking and duty of disclosure are good examples, he says.

“Both were direct responses to life insurance issues… being swept up in broader issues is nothing new, but I always ask where the balance lies between consistency and being fit for purpose. Some of these blanket proposals are not fit for purpose.”