An outraged broker is preparing to take legal action against Cox Insurance after its decision to close its software system Brokersoft.
Brokers using the system were sent a letter, dated 30 September, stating that the system would be withdrawn on 31 December 2004.
Cox bought Brokersoft in January 2003 from software house New Millennium Technologies (NMT), which collapsed in December 2002.
Topaz Insurance Brokers managing director Richard Mikula said: "I'm talking to my lawyers because when Cox bought Brokersoft, they said they would honour any outstanding contracts. The contract I have with Brokersoft allows at least a six month run-off before termination. When NMT went bust, we were at least given run-off for a year."
In the letter, Brokersoft deputy managing director Paul Dodds said: "All mid-term adjustments will have to be handled direct with the appropriate insurer on a manual basis from January 1, 2005."
Mikula said: "I don't know how we can do that. Brokersoft don't seem to care. We put at least £500,000 through the system at the moment, so it may cost them."
Cox head of group marketing Kevin Gill said: "We wrote to all Brokersoft users notifying them that the system would be withdrawn by 31 December 2004 due to the compliance requirements of the FSA, which come into effect in January 2005.
"Cox has offered all users the opportunity to transfer to brokersure.co.uk free of charge and provided them with contact details for further information."
Last month Cox announced its intention to sell Brokersure.
