The Association of Medical Insurers and Intermediaries (AMII) has written to the Financial Conduct Authority (FCA) to express concern about the effect of unauthorised lead-generation websites on the PMI industry.
These websites, operated by lead-generation companies, often imitate those of genuine health insurance brokers to capture leads, which are then sold on to authorised firms, AMII warned.
Outgoing AMII vice-chair Brian Walters, said: "We have found over 25 of these websites and there are doubtless others. Although the small print usually makes clear that leads will be passed to an authorised intermediary, use of the first person such as 'we work with all the top UK private medical insurers' misleads consumers into believing that the website is operated by a broker."
In October 2013 eSmart Media Ltd, which runs the website bestmedicalcover.co.uk, published an advertisement titled Our 3-Step Guide to Avoid the NHS Crisis.
It claimed the NHS had been responsible for 13,000 deaths, as a result of medical negligence, since 2005.
The Advertising Standards Agency (ASA) received 54 complaints about the figures and the ad's references to the Keogh Review of the NHS, which were described as "misleading." ASA ruled the ad must not appear again in its current form.
However the ASA ruling referred to bestmedicalcover.co.uk as a "health insurance comparison website".
An extract from the AMII letter warned such sites "have the potential to damage the reputation of the health insurance industry and they represent unfair competition to our intermediary members."
The letter also said: "Firms that shoulder the significant burden of regulation deserve a properly policed market.
"These websites are competing for business with authorised brokers and they are able to be much more aggressive in their marketing because they are under no obligation to ensure that their promotions are clear, fair and not misleading."
