Giant broker Aon has sparked a row with St Paul by claiming the insurer could exploit the £250 million solicitors' professional indemnity market after it won the exclusive contract to run the Law Society's scheme.
Aon claims St Paul now has access to information about individual solicitor firms which may be denied to the rest of the insurance market.
It says St Paul could use the data to unfairly dominate the market and impose steep premium rises.
But St Paul has dismissed the claim saying it is determined to ensure that a fair market exists.
William Man of Aon Risk Services said: "It is obviously important that The St Paul does not have access to more data than other approved insurers.
"If, however, this is the case, then one must question whether this is "fair" competition.
"In other PI markets, we have seen that when one underwriter dominates the market there is a danger of steep rises in premium."
The row coincides with the insurance market gearing up to grab a share of the £250m of solicitor PI premiums that will be released to the open market from September 1.
The one-off-event has been created by the scrapping of the previous mutual fund - the Solicitors' Indemnity Fund (SIF) - which had a monopoly on the first £1m of PI bought by a firm of solicitors.
Aon fears that St Paul will have access to SIF data about individual firms' past claims history while other insurers will only have access to the aggregate claims history.
The information could be crucial because it was the poor claims history of individual firms which led to the mutual being scrapped.
SIF ran up a £400m shortfall caused by the late 1980s conveyancing boom and collapse of the property market.
Under its contract, St Paul has employed most of the existing SIF staff who bring with them detailed knowledge of individual firms.
Man further complains that other insurers seeking Law Society approval to sell PI insurance will only have authorisation for a year, while St Paul has signed a long-term deal with the Law Society.
But St Paul rejects all the charges against it.
"We were subject to a rigorous selection process by the Law Society and its advisers and we believe that they were determined to ensure that a fair market exists," said Martin Hudson, the UK general manager. "Our appointment as the joint venture partner with the Law Society included the provision of services for the run-off of SIF and as such is constructed on a long-term basis," he added.
The Law Society will announce its list of approved insurers in April.
The SIF has begun the process of rationalising its panel of legal firms in preparation for entering run-off.
SIF receives about 4,000 new cases a year and as many as a possible are resolved by its in-house solicitors.