A Cornish intermediary furiously claims his business was placed in jeopardy by Association of British Insurers compliance monitors who instructed insurers to cancel his agencies without warning.
The experience has led Camborne Insurance Services managing director Leslie Potton to liken the monitoring process to a runaway train which potentially left his firm heading for the buffers.
It was left to his direct intervention to successfully persuade insurers not to cancel his agencies.
The trouble began when the ABI's monitoring agents, PricewaterhouseCoopers, sent Potton a letter while he was away on holiday, raising concerns from an earlier audit visit last June.
It requested he should reply by July 28 or PWC would report him to the ABI. His staff acknowledged the letter dated July 7 saying Potton would attend to the matter when he returned on July 31.
By then the three week reply period had elapsed and Potton claims PWC forwarded the report to the compliance monitoring office without any warning.
He said PWC did not tell him he risked not complying with the ABI's code of business and he only realised this when he received a letter on August 17, from the compliance monitoring service. This said that unless he implemented the PWC report, its insurer members would cancel his agencies after September 14.
Potton said this breakdown of communication needlessly threw the future of his 23-year-old firm and its six staff into the balance.
“I feel livid that they have used a sledgehammer to crack a nut,” he said.
Almost 4,000 intermediaries are monitored by the ABI of which 40% can expect an annual visit from its monitors.
ABI spokesman Vic Rance said it was surprised to hear the Cornish intermediary had experienced problems with the monitoring system.
He said: “The system is based on persuasion and co-operation and its time limits have been endorsed by the Office of Fair Trading.” But he stressed the decision to cancel agencies rested with individual insurers.
A spokeswoman for PWC declined to comment on the case citing client confidentiality as the reason.