Senior brokers have attacked the FSA for its criticisms of brokers in its work on conflicts of interest.
In a letter to Insurance Times, the seven brokers, which have formed the Regional Broker Committee of Biba, rejected FSA claims that conflicts of interest are widespread in the regional broker market and that commission disclosure could be necessary.
The criticism comes just over a week before the deadline given to brokers by the FSA to show evidence that they are managing conflicts of interest effectively.
The brokers blasted the FSA for suggesting that brokers were in some cases acting fraudulently and criticised the regulator for acting with a heavy hand.
Grant Ellis, Broker Network chief executive, said: "There isn't the evidence to support what the FSA is doing. It shows if look for skeletons in closets you will find them."
Another broker, Alec Finch, chairman of Alec Finch Group, said the regulator had accused brokers of being deliberately deceptive.
He said: "Its conclusion is more than conflict; it suggests bad faith, even fraud, and goes to the heart of the relationship we want to develop with our regulator. It's difficult not to sound defensive when the regulator appears to be seeing malpractice at every turn when there is, frankly, no evidence."
The brokers also criticised the FSA for visiting just 38 firms before issuing the 'Dear CEO' letter.
Biba chief executive Eric Galbraith said: "The debate around what might or might not be potential conflicts or perceived conflicts is one that highlights the need for the FSA to maintain proportionality, focusing on risk based cost beneficial regulation."
The FSA said it would meet the committee in February. It denied that brokers had been accused of acting fraudulently, and said brokers should protect themselves from firms which could allege malpractice by using the right systems to manage conflicts.