Lloyd's broker Thompson Heath and Bond (THB) this week pulled the plug on its £30m guaranteeing book, selling the account to HML Marketing, formerly Holman Marketing.
HML acquired the business for an undisclosed percentage of the next 12 months' income. THB will cease to act as a guaranteeing broker on July 1.
The firm's chairman Vic Thompson said: "The reason we have stopped guaranteeing is because we are growing strongly in other areas."
THB's income for motor fleet jumped from £7.4m in 1998 up to £10.1m in 1999. Similarly, the company has increased the size of its book of North America business.
Last year THB's commission from guaranteeing business was £300,000, 3% of its total income.
But Rodney Boot, managing director of HML said the reason THB had ceased guaranteeing was because working with a limited amount of brokers was not viable.
He said: "If just one left a bad debt it could end up being up to a quarter or a third of its annual turnover."
For the past two years, THB has also been paying off a massive debt after the collapse of non-Lloyd's intermediary Alliance left the company owing £4.5m to Lloyd's underwriters.
The final installment of that debt was paid off last month.
HML is now in process of vetting the 40 brokers that were guaranteed by THB, to see whether it will continue working with them.