The Police Service of Northern Ireland (PSNI) has warned the Federation of Small Business about endemic grossing up.
In a speech given at Belfast Castle, PSNI Detective Chief Inspector Larry Cheshire said he had been told by industry experts that grossing up was common practice amongst many brokers.
"It [grossing up] has been described to me by one industry insider as endemic," Cheshire said.
He added that brokers who are guilty of grossing up could be committing criminal offences.
"As the practice is not transparent to the policyholder, it is possible that, in their efforts to disguise it, those brokers employing this practice may have committed criminal offences such as false accounting, theft or deception."
A BIBA spokesman denied that grossing up was common practice amongst brokers. "The PSNI comments may relate to broker chains under investigation, but I don't think grossing up is endemic."
The PSNI fraud unit is currently supporting the SFO in its investigation of an apparent insurance fraud affecting around 1,000 small businesses in Northern Ireland.
The PSNI said the alleged fraud has cost policyholders around £3.5m in lost premium.
