Large quoted insurance companies could face investigation by the Office of Fair Trading following the implementation of the new Competition Act, says a broker.

John Lynch, of Insurance Advisory Service (IAS), said it was now time to "go for the throat" over what he claims is an abuse of a dominant position by large insurers.

He has already written to Royal & SunAlliance over an advertising leaflet offering motor insurance direct at prices much cheaper than those available to brokers. And he says this could be followed by a reference to the OFT.

Among the provisions of the Act, which came into force at the beginning of March, are that conduct may constitute abuse of a dominant position if it consists in "imposing unfair purchase or selling prices or other unfair trading conditions".

It also condemns "applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive advantage".

Companies found guilty of contravening the Competition Act can face a fine of up to 10% of annual turnover.

Lynch said: "What we want is a much more level playing field."

Another broker, Swarn Singh of Villa Insurance Service, recently warned of insurance companies cancelling agencies and taking the client bank themselves.

In Northern Ireland, small firms have been urged by accountants to "blow the whistle" on "bullying" bigger firms.

However, Andrew Paddick, director of the Institute of Insurance Brokers, said the Competition Act was unlikely to change the behaviour of large brokers radically.

He warned that any complaints under the Act would be "painfully slow", though it was not just the OFT but EU competition regulators to which brokers and intermediaries could complain.

A spokesman for the OFT said if companies were acting in a way to try to push out competition – using "predatory pricing" – then there might be grounds for a complaint under the Act.

"But if a company is just undercutting on price, that would probably be a commercial matter," he said.

A spokesman for RSA said it was looking into the matters raised by IAS.