Only 40 brokers have applied for authorisation under the new claims management company regulations due to come into force next month, Insurance Times has learned.

Under the rules, brokers that procure 25 or more claims each quarter will have to comply with Department for Constitutional Affairs (DCA) standards from 23 April.

Of the 1,250 companies who have applied for authorisation just 40 described their principal business activity as broking.

The low number of applications prompted Biba to brand the regulations as "disproportionate".

"It does seem daft to impose a set of regulations on just 40 companies," said Steve White, head of compliance and training at Biba. "This is taking a totally disproportionate approach to regulation."

The extent of the claims procurement industry is unknown and it is understood there are no plans to investigate whether brokers should be authorised.

Instead, lawyers have been warned not to buy claims from firms which are not regulated because they will be liable for prosecution.

Claims management regulator Mark Boleat warned that those going through the authorisation process would be thoroughly examined.

"As part of the application process, websites, and in some case contracts, of applicants are examined," he said.

"In many cases these have shown significant breaches of the rules of conduct. These breaches must be rectified."

'The DCA consultation paper on personal injury reform will be published in April, the DCA has confirmed.

Speaking in the House of Commons this week, Vera Baird, parliamentary under secretary for the DCA, said the consultation paper would be put to market next month.