Swinton is keeping the full commission it would have received had Hilary Bagnall kept her motor cover going for the entire year.
The company's commission charges stood at pounds 87 until she wrote in to complain about them. She then received a letter from Swinton to say there would be a further refund of pounds 22.
Ms Bagnall, who runs an adult adventure club in the East Midlands, said: 'I have worked in sales for years and in my experience this is highly unusual. Normally, a certain amount of commission is clawed back if a policy is cancelled early.'
Her problems began in August when she was setting up her business and decided to buy a new van for her work. The dealer was unable to deliver the vehicle for six weeks but offered her the loan of another van as long as she was prepared to insure it herself.
Ms Bagnall contacted the Trent Bridge branch of Swinton Insurance and told staff she would want to transfer her cover to the new vehicle as soon as it was delivered. She was quoted a price of pounds 637 through the Chelmsford-based Lion Insurance, which she accepted.
After six weeks, the new van was delivered, but when she asked for her cover to be transferred, she was told there would be an extra charge of pounds 238, making a total of pounds 875.
'I thought this was far too much, so I contacted Direct Line and was offered the same cover for just pounds 382. I immediately wrote to Swinton, telling them I wanted to cancel my policy with them and asking for a refund,' Ms Bagnall said.
After several weeks, she went to her Swinton branch and was told that Lion Insurance's refund policy was to charge one third of the premium fee when cancellations took place. The net refund was pounds 425, minus Swinton's commission of pounds 87, leaving her with pounds 338.
This has now been upped to pounds 360 after Swinton's head office in Manchester discovered that there had been an 'administration oversight'. A letter from Swinton adds: 'I can assure you that the branch has followed company procedure and that the fund you receive is in accordance with our terms of business.'
Alastair Noble, a Lion Insurance spokesman, said his company is not responsible for Swinton's charges. The high cancellation charge is caused by the initial costs of setting up a policy. Statistics also show that a higher proportion of claims take place soon after a policy is taken out, he added.
Swinton's marketing director, June Price, confirmed the company's policy is to levy the full annual commission where early cancellation has taken place, other than in exceptional circumstances. She said: 'It is common practice in motor or household insurance for intermediaries to charge full commission even if cancellations take place in mid-term.
'Our charges and terms of business are prominently displayed in all our branches. Clients who take out a policy through us are signing a contract. If they break that contract and seek out another quote, then they must realise that there is a price to pay.'
Ms Price said the disparity between the first charge of pounds 637 and the second of pounds 875 arose because Ms Bagnall's loan van was a cheap diesel model while the new one, a turbo, was in another, more costly insurance group.
Swinton is mystified at how she was able to get such significantly cheaper cover from Direct Line, which does not accord with its own knowledge of charges for similar risks by other insurers.