LONDON (Reuters) ? The UK?s financial watchdog said on Monday that it would it formally investigate whether it should require insurance brokers to disclose how much commission they make for arranging cover for risks.

In a speech given to London insurers, the Financial Services Authority?s chief executive John Tiner said: ?We feel the time has come for us to take a more objective and forensic look at the possibility of mandating commission disclosure,? Tiner said.

The investigation would look into whether the lack of transparency regarding insurance brokers? remuneration is harming customers? interests or preventing the market from operating efficiently, Tiner said.

If the probe revealed that the lack of information provided by intermediaries was creating a problem then it would consider regulatory intervention, Tiner said.

Under current rules insurance brokers are not required to disclose how much they receive for arranging cover for risks, unless specifically asked to do so by their clients.

Broker fees have been a subject of intense controversy since a 2004 probe in the United States by New York Attorney General Eliot Spitzer showed some brokers had rigged bids for cover.

The regulator had hoped the insurance market would hammer out an agreement itself. But ?it has become increasingly apparent that an agreed industry-led solution is likely to be light years away,? Tiner said.

That was because insurers and brokers have conflicting views on the issue, Tiner said.

Insurers believe they should know exactly how much brokers are making for a particular piece of business so they can get a proper grasp of their costs. Brokers believe the insurers are trying to simply beat down their fees.