Lloyd's and London market insurers are set to begin an examination of brokers' compliance plans, which has been branded "pointless".

This month auditors, employed by insurers, will start to assess the progress of brokers' compliance programmes.

This is intended to allow insurers to determine which of their brokers are likely to be compliant by 2005.

But brokers have criticised the move. LMBC executive director David Hough said: "This is a pointless exercise. We will be keeping the LMA and the IUA informed of the progress of our members."

Other brokers said the initiative was of no value and that was simply a money-making exercise.

The audit and status monitoring project is supported by the IUA, with independent consultant D3 Risk Control undertaking the assessments.

Insurers will subscribe to the service, each sharing part of the fixed total cost. They will receive the reports as they are completed, in addition to updates.

Brokers will also receive a copy of the report to enable them to take corrective action where necessary.

D3 Risk Control will monitor the progress of brokers' implementation plans and any remedial actions throughout 2004, reporting regularly to subscribing insurers.

D3 Group risk and regulatory consultant John Quigley said insurers wanted to determine whether their brokers were likely to achieve authorisation.

"The FSA is not going to announce any decision to authorise until December, but insurers need to know much sooner than that. Only a properly structured investigation can reveal how likely a broker is to achieve authorisation," Quigley said.

Another senior market source said that the initiative was simply a revenue generating exercise and was of no value.