INSURANCE Commissioner Stephen Ip is expected today to lay the law down to insurance companies to prevent a threatened commission and agency poaching war. The action follows growing tension between some of the major insurance firms in Hong Kong. Mr Ip is expected to concentrate on halting the churning of policy-holder contracts, the switching of policy-holders between companies, the poaching of insurance agents and the spreading of rumours to damage reputations. He is to meet the Life Insurance Council today to discuss market practices that could tarnish the image of the industry. A government spokesman said the meeting would focus on the poaching of agents and the possible damage to the industry if such poaching led to a commission war. Mr Ip said the meeting was being called to remind insurers of the need to observe good market practices and maintain the industry's image. ''We are not acting in response to what happens to one particular company. We have seen signs that there might be vicious poaching in the market soon,'' Mr Ip said. He said several insurance companies were restructuring and expanding and were eager to beef up their teams of agents. He stressed that the Government was concerned about the likely confusion caused to policy-holders by unscrupulous poaching of agents, and that it planned to communicate this concern to the industry. The resignation of National Mutual Asia's chief executive Andrew Yang sparked off rumours that half the company's 3,500 sales force would resign. ''If it is a normal staff turnover, that's fine. If it is due to poaching and of a vicious nature, then we would discourage such a practice,'' Mr Ip said. Aggressive poaching prompted by new companies entering the market was likely to mean a commission war. ''The only incentive a new insurance company can give to attract people is to raise commissions,'' Mr Ip said. Such a war would be likely to damage the industry. Apart from increasing commissions, poaching would lead to agents persuading clients to switch to other policies at the new companies. ''If such switching of policies happens on a large scale, that will weaken policyholders' confidence in the industry,'' he said. He said the code of practice regarding agents' conduct covered the switching of policies. The meeting would draw practitioners' attention to the clause and reiterate its significance. The insurance industry has been trying to improve its image through self-regulation and increased transparency. It set up an insurance claims complaints board a few years ago to handle unresolved claims about insurers. In a bid to inject more discipline into the industry, it has also begun registering intermediaries, and requires all brokers and agents to register with the Federation of Insurers. Federation chairman Joseph Ip has said that the group will focus this year on increasing transparency in the fixing of premiums and drafting of insurance policies, with a view to making customers more comfortable with the content of policies. Like many other labour-intensive industries, the insurance sector has long found it hard to attract agents, especially on the life insurance side. Mr Ip said there had been no growth in the sales force for the whole industry last year. The approximate 25 per cent premium growth last year was due to increased productivity. ''Since life agents' income is based on commission, the huge wage inflation outside has driven potential newcomers out to other markets,'' Mr Ip said.