Consumers may find it more difficult to receive independent advice on insurance products because of the practices of insurance companies, a brokers' association has warned.
The Professional Insurance Brokers Association (PIBA), which represents 800 brokers, said some life assurance companies were increasingly coaxing brokers to become "tied agents" and only sell the products of one company.
Mr Diarmuid Kelly, chief executive of PIBA, said insurance companies were using "scaremongering tactics" to convince people to become tied agents.
Insurers are offering to take care of the substantial paperwork and bureaucratic procedures required under Central Bank regulations in exchange for the brokers becoming tied agents for the company, according to PIBA.
PIBA has also accused general insurers Royal & Sun Alliance of setting down annual financial targets to allow brokers to be able to continue to deal with the company. If brokers fail to reach this volume of business, their agency with the company is cancelled.
A spokesman for Royal & Sun Alliance said the company was reviewing its relationships with individual brokers on an ongoing basis but that some intermediaries had been given notice at the end of last year.
"Decisions to end any agency appointment take place after a lengthy consultation with the broker," the spokesman said. He did not want to comment on any minimum level of business required to retain an agency with Royal & Sun Alliance.
