FSC’s Ms Loane is asked what life insurers expect from advisers in return for the $6 billion in commissions that they paid out over the past five years.

“I really couldn’t say with certainty,” she says.

Ms Orr talks about the scaling down of the cap on upfront commissions, which is set to drop to 60% in 2020 and asks whether there is a case for removing them altogether to prevent conflicts of interest.

Ms Loane says it has been thought that people have to be persuaded to purchase life insurance and as a result there is also a need to incentivise sales.

The FSC has yet to form a view on the level of commissions after 2020 and whether they should be entirely phased out, she says.

“That is a view that various people have had, including in the FSC,” she says.

Ms Orr suggests that the commissions ultimately lead to increased costs for consumers in the form of higher premiums.

“I couldn’t say,” Ms Loane says.

The commission highlights that so far there have been no sanctions applied under the life insurance code of practice, which was introduced in 2016.

The FSC is considering seeking ASIC approval for the next iteration of the code, Ms Loane says.

Ms Orr has completed her questioning and will shortly begin a closing statement.