Today is the British Financial Services Authority’s (FSA) official cut-off date for licence applications. The FSA hasn’t yet revealed just how many licences it has processed.

And it’s also the first day of a battle that may well decide how British brokers and insurers relate to each other. Andrew Paddick, Director-General of the Institute of Insurance Brokers, says insurer Royal & SunAlliance (R&SA) is trying to force a new “non-solicitation” agreement on brokers.

The new regulations have made it necessary for terms of business agreements between brokers and insurers to be re-written. Mr Paddick says one of the most important clauses will be one preventing insurers and wholesale brokers using confidential client information to solicit business away from the client or to pass information on to a third party.

But R&SA has upped the ante by indicating it wants to “keep its options open”. Speaking to Sunrise Exchange News at the Singapore International Insurance Brokers conference yesterday, he said the move is extremely worrying for brokers.

He believes insurers could force brokers to agree to letting them use confidential information by making it a condition of doing business with them. “They could pick them off one by one. A broker’s client bank constitutes the principal asset of his business.

“Unless brokers secure fair terms of trade with insurers, they will face a very uncertain and perilous future. If brokers fail to secure their legitimate position now, they may well repent forever after.”

Mr Paddick has threatened to make the R&SA issue a test case under the UK’s Competition Act.