The ABI is considering legal action against the FSA over its block transfer rules, claiming they are "anti-competitive".

Insurers argue that the rules are contrary to consumer interest in that the administrative burden of contacting policyholders will mean that books of business will not move.

Norwich Union intermediary business director Ken Wallace said: "They aren't workable and are working against the consumer."

An ABI spokesman said the organisation was considering whether to take legal action. He said: "We have gone to the FSA [with our concerns]. It has indicated what the rules are. We are now considering what to do."

The block transfer rules govern the transfer of the underwriting of books of affinity business from one insurer to another. Affinity providers must obtain the explicit permission of each policyholder, which could number many thousands.

Lawyers said the ABI could be successful in the challenge. Pinsent Masons associate Alexis Roberts said: "It is difficult to see how the block transfer rules are different to the tacit renewal rules on which the FSA conceded."

The FSA declined to comment.