Aon New Zealand has had its corporate membership of the insurance brokers’ peak body cancelled after failing to pay a $NZ15,500 ($13,800) fee increase.

The Auckland-based broking giant, one of the two largest brokerages in New Zealand, has also had its representation on the Insurance Brokers Association of New Zealand (IBANZ) board of directors cancelled.

insuranceNEWS.com.au understands Aon New Zealand, which made a profit of $NZ50 million ($44.5 million) last year, was dropped from IBANZ membership last week. Members were told of the move after the association’s AGM in Auckland on Friday.

This means the company’s broker employees are also no longer members of the association.

The impasse is understood to be based on a decision by IBANZ to raise its membership fees this year. The rise was recommended by Finity Consulting in a report on the association’s future operations.

The fee for the four largest IBANZ members rose from $NZ29,500 ($26,262) to $NZ45,000 ($40,061). IBANZ CEO Gary Young has confirmed that the three other major brokerages in New Zealand have agreed to pay the $NZ15,500 increase.

“This situation isn’t fair on the other members,” a source who attended the post-AGM meeting said. “It had to come to a head somehow.

“Now they’re sitting outside the brokers’ national group and not contributing to the wider broker industry the way they should be. This isn’t the time to play games. There are serious issues involving brokers that have to be dealt with.”

It’s the third time Aon New Zealand and its broker employees have been outside the association. The company was slow to join IBANZ following its formation in 2004 from the merger of the Corporation of Insurance Brokers and the Independent Insurance Brokers Association.

Then it quit the association for three-and-a-half years after Richard Russell, a former Aon affiliate who set up a new business with arch-rival Crombie Lockwood, was elected IBANZ president in September 2006.

Beyond confirming that three of the four largest corporate members have agreed to pay the fee increase, Mr Young declined to discuss the Aon situation when insuranceNEWS.com.au contacted him at the weekend.

Today is a public holiday in New Zealand, and Aon New Zealand CEO Geoff Blampied could not be contacted for comment.