Royal Bank of Scotland Insurance (RBSI) has denied it is setting up 'NIG Direct' with the establishment of RBSI Brokers Ltd in Bristol.

The insurer has come under fire from the broker community since it recently announced plans to open an RBSI-branded intermediary with subsidiary NIG as the primary risk carrier.

Biba head of technical services Peter Staddon said: "Most brokers do not have an issue with another broker entering the market and competing against them for business.

"I do believe, however, that a broker has to show its independence. To be able to get what a client needs you have to be able to move business around. This is not possible if there is just one carrier."

RBSI intermediary and broker business managing director Charles Crawford reacted to criticism of the scheme with assurances that RBSI Brokers would use a panel of insurers to place business. But he refused to give any assurances on the amount of business that would be placed through NIG and the amount that would go out to the market.

He also confirmed that RBSI Brokers would have NIG underwriting staff on site.

He said: "This is not NIG Direct. What we are trying to do is offer a slicker, more professional service while encouraging the two banks in our group (NatWest and Royal Bank of Scotland) to place more business through the broker.

"However, in terms of risks we would like NIG to be the primary underwriter."

RBSI Brokers will open on 1 October, focusing on the small business market. It will also operate through a panel of brokers nationwide.