Trade body Aiib has become involved in a war of words with York-based E & L Insurance after the latter sent out a mailshot to policyholders of Aiib's retail brokers.

In the letter, E & L offers policyholders six months' free insurance, with the proviso that 'the policy you choose is not the same type as you already have with us'.

Aiib chairman Mike Slack (pictured) said: "Client ownership is a subject which many insurers are reluctant to discuss but it will have to be resolved by the industry.

"This may develop from the GISC when it becomes effective, but in the meantime, abuses such as the E & L case are likely to continue."

But a statement from E & L countered: "It is obvious that there are lessons to be learned on both sides as a result of this correspondence. We are aware that various insurance companies do write directly to policyholders and in this regard, we are no different."

E & L said it simply wanted to ensure that its products were fully marketed and pointed out that commission would be paid if the policyholder was a broker's client.

The statement continued: "We, like all insurance companies, welcome constructive dialogue with the Aiib on how to cost-effectively maximise the benefits of the policyholder relationship."