Steadfast Group has rejected an accusation of “market power misuse” made by Dynamic Insurance Services, a Perth-based broking and authorised representative network.

The WA broker and its director Cynthia Yap also allege Steadfast, Allianz and QBE engaged in “anti-competitive conduct” and “exclusive dealing” that included “restricting access to insurance products”.

Dynamic made the accusations in a statement of claim lodged in March with the Federal Court. It seeks more than $3 million compensation for losses.

Steadfast, the first respondent in the lawsuit, filed its statement of defence this month, rejecting the allegations.

The listed broking group denies any conduct that “affected competition in the market for insurance broking services”, the statement of defence says.

Dynamic launched the action after its membership of the Steadfast broking network was terminated.

Steadfast ended the partnership in January following a compliance audit of the WA broker, according to the court documents seen by insuranceNEWS.com.au.

After that, Allianz and QBE “terminated or declined to renew” their broker agreement with Dynamic, the statement of claim says. “Those terminations occurred within a short time frame.”

The statement of claim alleges the misuse of market power restricted Dynamic’s “ability to operate competitively. The terminations materially restricted access to insurers.”

It says QBE and Allianz are among a limited group of insurers that provide workers’ compensation cover, which is compulsory for employers.

The findings of the compliance audit are not detailed in the statement of claim or defence statements.

The two sides agree Steadfast notified Dynamic of concerns regarding the WA group’s ARs about September last year and that its membership of the Steadfast network would be reviewed.

They also agree Steadfast requested an audit; the audit was conducted by an entity linked to Steadfast; Dynamic paid for the audit; and Dynamic provided access to internal systems and confidential client information.

Dynamic says it “co-operated fully” and “commenced implementing recommendations”, but Steadfast says it “does not know and therefore cannot admit” that the actions have taken place.

Allianz filed its response to the claim last month, rejecting the alleged misuse of power, anti-competitive conduct and other claims. The court did not supply a QBE defence document.