Top aviation brokers are under investigation for allegedly sneaking hidden charges into their dealings with clients.
It has been learned that the European Commission is investigating reports that major brokers concealed payments, such as overrider commissions, in placing cover for airline customers.
Overriders are payments used to reward brokers for generating high volumes of business for insurers.
In the case of brokers placing business for major airlines, the sums involved could run into tens of millions of pounds.
Such payments are thought to be against the spirit and possibly the letter of EU law.
Investigators learned of the allegations from market rumour, as airlines were scrambling for cover in the wake of the 11 September attacks.
The ensuing crisis in aviation insurance left the world's airline fleet within hours of being grounded, when insurers invoked clauses cancelling cover.
The market for aviation third party war risk insurance is not yet fully recovered and brokers have played a crucial role, liaising with governments, airlines and insurers.
An airline source said: "When you pay a broker a fee for its services, rather than commission, it is to keep it completely objective, so it has nothing to gain or lose. If there's a hidden commission or fee, it's questionable whether it's morally right."
Aon announced last year it would stop taking overriders as part of efforts to comply with GISC regulations and to increase professional transparency.
The investigation is being conducted by the competition directorate general under Commissioner Mario Monti. It is also believed to be looking into insurers' use of the seven-day cancellation clause, after the terrorist attacks in the US.
A commission spokeswoman was unable to comment.
In a separate development, Warren Buffet is in talks to buy the world's biggest aviation insurer, Global Aviation Underwriting Managers.
