The ABI is confident that a deal can be reached with the FSA over block transfer.

ABI head of market regulation Chris Hannant said he was hopeful there would be a "meeting of minds" in discussions with the FSA on the matter this week.

An FSA spokesman said the regulator had agreed that companies could insert clauses, known as prior request clauses, into policyholders' terms of business agreements as a way to meet the requirements of the rules.

Use of prior request clauses would solve the block transfer problem in the long-term.

But sources said the FSA was "not interested" in the ABI's proposal for a two-year waiver of the rules to avoid problems in the short term.

Hannant accepted the FSA was "unpersuaded" by the arguments for the waiver but said the ABI was exploring another avenue, although he declined to give details.

The block transfer rules govern the transfer of books of affinity business from one insurer to another.