Concern is mounting this week about the wholesale intermediary Servico after it suddenly ditched its controversial £60,000 fee for a franchise agreement in order to place its taxi business.

Several more brokers have criticised both the franchise agreement and the operation of the North-ampton-based wholesale intermediary since last week's front-page story in Insurance Times highlighted broker fears.

One broker now claims Servico is refusing to return his calls despite his having allegedly placed about £150,000 worth of taxi business through the company.

Another claims he is cancelling policies because Servico has not returned certificates of insurance.

And it emerged that the Association of Insurance Intermediaries and Brokers (AIIB) warned its members to beware of dealing with Servico in its August newsletter.

In a terse statement Servico now said it was “too soon to establish numbers, rates and franchise cost at this time.”

“Since the news piece in last weeks Insurance Times, that provided us with a positive response, we are still currently test-marketing the franchise concept to fleet management and insurance facilities for our Motorcade division, specialising in private and public hire vehicles.”

The AIIB had been alerted to Servico's scheme in August by a member who had been approached to take part.

The franchise costs £60,000 to set up and £25,000 per year therafter with a 20% deposit required.

A commission rate of 10% on premium income is payable but is reduced to 5% in the event of a claim. Servico has two schemes in operation, Motorcade and Roadsurfer, although the former is currently suspended because of problems with the licensing authorities.

AIIB chairman Michael Slack said he would be wary of anyone who charged to open an agency to do business.

“I would wish to have an in-depth look at their company operations and relations,” he said.

The taxi insurance industry is in turmoil currently after several big name insurers have pulled out or reduced their work in the sector.

Pritam Atwal, principal of Whiterose Insurance in Hounslow, said he had placed more than £150,000 worth of business through Servico in the past three months but says Arnold is now refusing to take his calls since he refused to accept the franchise agreement.

“I've left 20 different messages for him and he's never got back to me,” Atwal said.

Surinder Bhamra, principal of Insureline, said he was cancelling policies because Servico had not returned paperwork for business he gave them six weeks ago.

He also claimed Servico would not return his calls after he refused the franchise two weeks ago because Servico would not negotiate the price.

“I don't know where I stand on my existing policies with Servico,” he said. “God only knows what will happen if I get a claim,” he said.