CBS Insurance is to acquire the members agency business of Amlin for an estimated £6.5 million.
The two companies have entered a Head of Agreement for the sale of Amlin Private Capital and associated companies.
CBS managing director Charles Philipps said: "This acquisition fulfils part of our strategy to enhance the earnings of CBS Insurance Holdings and strengthen the position of Names."
Amlin says it will use the proceeds of the sale to help it to develop its core underwriting business.
Amlin will retain the right to the profit commission receivable in respect of its members' agency activities up to and including the 2000 year of account.
Amlin's member agency business is expected to post pre-tax profits of £2m for the Amlin Group in 1999.
The sale is subject to Lloyd's and other regulatory approvals.