The newly launched private medical insurance (PMI) scheme launched from the British Insurance Brokers' Association (Biba) is coming under increasing criticism from brokers.
They feel the Association has departed from its ethos of supporting smaller brokers and also questioned whether the deal was legitimate under FSA rules.
However Biba has refuted this and maintained that the policy was set up to support its membership.
Members are still unhappy despite, as COVER reported, the contract being temporarily withdrawn to remove a clause that transferred all existing PMI business of those who joined the scheme to its partner, Jelf.
Trevor Hunter, director of Halcyon healthcare and a Biba member, told COVER he felt with this scheme the Association was neglecting the rank and file membership.
"Here they're favouring one bigger broker and encouraging people to go to that bigger broker, and inevitably smaller brokers like me are put at a disadvantage," he said.
"Certainly Biba shouldn't be favouring one broker over another but they are saying we're going to encourage Jelf to take the business, not you guys.
"If they evaluate insurance companies and say we think this company is offering a good deal and its open to all of you then that's fine, but if they push it all in the direction of one big broker, that's wrong," he added.
And Hunter also queried whether the agreement was compliant with FSA rules regarding introducers not being able to offer advice.
"It is arguable that if an adviser, points their client towards a single group of policies offered by a broker who has negotiated bespoke terms with a single insurer, this amounts to a recommendation without having searched a wide selection of the policies available," he said.
"There's no indication that they will offer whole of market advice, and that puts the introducer in a position where they are directing their client to a specific policy and so making a recommendation."
"I've also spoken to other brokers who say the whole agreement with Jelf should be scrapped," he added.
The FSA confirmed that general insurance introducers are not allowed to give product guidance advice to clients before referral.
Hunter's remarks around supporting smaller brokers have been supported by Susie Colley, Susie Colley, managing director of West Country Health Care and a member of the Biba healthcare focus group.
She supported the belief that Biba should be assisting smaller brokers and complained that the contract with Jelf was not approved by the healthcare focus group.
Biba has responded to the criticism by insisting that its regulation team have found nothing connected to the scheme that has any FSA implication.
Peter Staddon, Head of Technical Services at Biba, explained: "The PMI scheme was launched to help and support BIBA members, specifically general insurance brokers who do not specialise in PMI.
"It forms part of our range of schemes that benefit members by offering access to complex markets and products that might not otherwise be available to them and also provides the support of a specialist broker to allow non-specialist brokers to sell the product.
