Director general of the IIB Andrew Paddick has denounced the ABI's latest intermediary expulsions, claiming they are nothing but "a sham".

Speaking to Insurance Times, Paddick raised a number of doubts about the ABI's move, accusing the association of making false statements or possibly acting illegally.

He said: "I am very suspicious about the expulsions. We are talking millions of pounds of premium, but what has happened to those firms and why haven't they protested more loudly? I think it is a sham.

"What has happened to the files, including the work in progress? And who has winding-up powers to push people out of business like this? It raises a lot of legal questions."

However, ABI deputy director general Tony Baker responded: "This is a very strange thing for him to say. Of course the agencies have been cancelled. The files have been passed to the insurers and they are now handling the policies. That is not a very difficult task."

Ray Stibbards from PricewaterhouseCoopers, the firm that is responsible for carrying out the ABI's code, added: "It is not actually the ABI that has cancelled the agencies, it is the insurers. At one point the ABI went down the legal route of naming and shaming, but that was never followed through because of the establishment of the GISC."