AXA's smallest brokers have been told to supply evidence that they will be FSA authorised or face the cancellation of their agency agreements

This week 200 Spirit brokers who failed to indicate whether they would be able to trade from 14 January 2005 received a letter from AXA warning that if they failed to provide the relevant information their agencies would be cancelled as of 5 December.

AXA head of broker development Colin Calder said that the move was necessary to allow the insurer to know which brokers it could deal with on its January renewals.

But other insurers have taken a softer stance. Royal & SunAlliance financial services and markets act programme director Blyth Morris said the company would continue to issue its January renewals "as standard" and would deal with problems over unauthorised brokers after 14 January 2005.

He said: "We will give orphan clients the opportunity to move broker or will deal with them direct. We would prefer the former."

Fortis distribution and development director Chris Dobson said the agencies of any unauthorised brokers would be run off from 14 January. "We will administer the policy until the next renewal," he said.

Towergate Partnership group chief executive Andy Homer criticised insurers for their approach to the problem of orphan clients. He said insurers had been "slow to act".