CNA Insurance has cancelled its agency with the specialist taxi intermediary Servico.
The news broke as police separately warned that thousands of taxi drivers are without insurance after buying cover from unauthorised taxi insurer Goldleaf.
Servico, which is based in Northampton, has been criticised by brokers since October after it demanded a £60,000 fee in return for a franchise agreement on taxi business.
It abandoned the franchise plan following several stories in Insurance Times.
CNA confirmed that it withdrew support on January 30. But it refused to comment further on allegations that staff had been disciplined.
Independent Insurance also cancelled an agency agreement with Servico last year.
Servico boss Stephen Arnold did not return calls from Insurance Times.
Brokers who deal with Servico have complained that the firm has not issued documentation for the past
few weeks. They also said that Servico's staff refused to confirm CNA had withdrawn its agency.
A spokesman for commercial motor intermediary Unicom said he had been told last Friday that Servico's inability to take business was temporary.
However, he said the situation had not changed by Tuesday.
“Clients haven't got documentation for the last couple of weeks,” the spokesman said.
“I know other agents who have Servico deals who are not very happy.”
Servico has been accused in the past of failing to return phone calls to brokers, who said they had cancelled policies because Servico had not returned certificates of insurance.
And the Association of Insurance Intermediaries and Brokers warned its members to be wary of dealing with Servico in its August 2000 newsletter.
Meanwhile, thousands of minicabs and black cabs may be driving without insurance after buying cover from Goldleaf Insurance.
Preston police have issued a warning to taxi drivers that they will not comply with the Road Traffic Act if their insurance was bought from Goldleaf.
They will need to buy further insurance from an authorised insurer.
Goldleaf, which is not a registered broker or insurer, had operated since September 2000 and sold insurance to taxi drivers in England, Wales and Scotland.
Detective Inspector Joe Kellett, who is leading the investigation into the company's activities, said the two men involved had been questioned by police but had not been charged.
Kellett said police were using Goldleaf's records to contact as many drivers as possible who had bought insurance, but admitted police had no idea how many were affected.
Instead, he encouraged drivers to contact police.
Operating an unauthorised insurance company is a contravention of the Insurance Companies Act, but the Financial Services Authority said it was unlikely to take action against the operators of Goldleaf, who have since closed their business.
Kellett said the two men, who were banking about £20,000 a month while the company operated, had promised to reimburse drivers who had bought insurance from them.
However, if they fail to do so, the Policyholders' Protection Board will not be able to help those drivers left out of pocket as the Policyholders' Protection Act applies only to those who buy from authorised insurers.