Insurers have threatened to axe the agency agreements of brokers that fail to provide information on insured drivers for the Motor Insurance Database (MID).
The Motor Insurers' Bureau (MIB) requires insurers to provide details of all insured drivers to the MID.
But brokers have been slammed for not doing enough to forward information to them in time, as insurers are generally reliant on brokers to supply this information.
Jim Noakes, director of distribution at Norwich Union said: "There is non-compliance on this right across the board. Most brokers believe it's not their problem but eventually it will be."
According to the MIB, just 40% of insurance companies are currently hitting targets set in January.
And now some insurers are threatening to withdraw the agency agreements of brokers who do not supply the relevant information on time.
Noakes said: " Persistent offenders risk having their agency agreements cancelled. They need to get their act together."
Norwich Union has written to and telephoned all of its brokers to draw attention to the issue.
A Groupama spokesman said: "Eventually we will consider ceasing business with those that fail to change their systems and help us remain compliant."
Criticisms levelled against brokers include failing to notify insurers of cancellations, lapses and mid-term adjustments at the first available opportunity.
From September, insurers not providing this information within 14 days will face fines of up to £250,000.
MIB chief executive Ashton West said: "Insurers are going to be hit hard because many brokers are not up to speed."
Peter Staddon, Biba's head of technical services, hit back saying: "It's very easy to blame the broker, but there are problems on both sides.
"We're doing everything we can to get this done, but some insurers aren't willing to reciprocate. If an insurer is complaining without changing its own systems we would recommend our brokers simply find another insurer."
