Over 35% of UK insurers could be facing hefty fines of up to £250,000 when the Motor Insurers' Bureau (MIB) starts to punish non-compliant firms at the end of the month.
According to the MIB, just 62% of the market had achieved the target of forwarding insurance details of 95% of their policyholders to the motor insurance database within 14 days, by the end of September.
The body has already written to insurers which were failing to meet the targets at least once warning them of the prospect of fines.
Ashton West, group chief executive of the MIB, said: "The actions of a number of insurers will come into force by the end of October and you can do an awful lot in a month."
The maximum fine will be £250,000 and the minimum £1,000.
The MIB said non-compliant firms can expect to receive demands for payment of fines at the beginning of November.
West added: "Despite the problems at some insurers, the broader picture is more encouraging.
"Across the industry 95.6% of data was forwarded to the database within 14 days during September, which proves it can be done."