The disclosure of commission in the life assurance and pensions industry has been discussed for years with no results. The forthcoming Insurance Act established guidelines on how companies express costs and commission to consumers.

In the 1990s many products were front-loaded or the commission and costs were taken in the first few years of the investment. This penalised customers who redeemed the product early in the contract.

Several years ago the commission structure in these industries was also deemed anti-competitive by the Competition Authority and discussions began on disclosure.

Many of the proposed changes, however, are already a reality thanks to competition, customer demand and pressure from consumer groups and the media. Today, many products spread the expenses over the term of the investment or the company accepts the risk instead.

In some cases, brokers' commissions are clawed back if the contract is redeemed early ensuring that the customer is sold the correct product.

In response to these positive changes, the Consumers' Association of Ireland (CAI) has softened its demands for full disclosure of insurance commission at point of purchase. The main problem with "hard disclosure" appears to be the size and complexity of the disclosure document. It was proposed as two pages but has grown to 20 pages says CAI spokesman Mr Eddie Hobbs.

Instead, the CAI believes that the forthcoming Insurance Act should give the Minister power to introduce point-of-sale hard disclosure at his discretion. Mr Hobbs says this creates a red button for the Minister to push if the industry abuses the system.

Despite this compromise position, the CAI insists that consumers are given simple information at point of sale and shown the total premiums contributed and the full policy value. The association believes the cooling off period should be extended from 15 to 45 days.

This period, which allows the customer to change their mind and back out of the contract without penalty, should also be included prominently in advertising and in the policy document.

Disclosure should not be necessary for pure protection policies, or those which are not attached to an investment-based product, CAI now says.

Life and pensions policies may present their commission and costs in a key features document which may be sent to customers after the sale has been made.

Until the rules and regulations are sorted out, consumers are advised only to purchase transparent products or insist that all charges over the life of the policy are specified in writing.