Norwich Union (NU) has confirmed it is in advanced negotiations with third parties for the sale of those parts of Hill House Hammond's (HHH) special lines book rejected by Towergate.

Up to ten business units including the Mitchells motorcycle business, marine, let property, equine, minibus plus, cherished cars, caravan and trailers were offered to Towergate shortly after the announcement of the closure of HHH.

Though rumours over complications on the sale were denied by Towergate, the underwriting agency has passed over some parts of the business.

A spokesman for Towergate said: "We are in the process of due diligence which we are finalising.

"HHH is a big organisation and it takes some time to go through but we expect to announce our plans within a month or so."

Towergate's sister company, The Folgate Partnership, announced last week it had completed the purchase of HHH Business.

The deal, first revealed in Insurance Times, involves a network of 14 regional offices, 251 staff and £57m in gross written premiums. Folgate confirmed it would be keeping the HHH brand.

This week Capita Insurance Services also confirmed it is in advanced discussions to provide run-off services for HHH. Under the deal, policy administration and claims management will be handled by an administration centre in Bristol and HHH staff will transfer to Capita by 30 September 2004.