Decision expected by end of the month.
Towergate is poised to acquire Lloyd's underwriting agency Fusion Insurance Services from troubled parent company SVB Holdings.
According to market sources the consolidator is in exclusive talks with Fusion, with a decision expected by the end of the month.
The source said: "Fusion is a strong brand and is looking for a partner with the capacity and reputation to allow it to grow. The two companies have been talking closely and it has been agreed that a deal would suit both."
Peter Cullum, executive chairman of Towergate, would not confirm "exclusivity" between the two companies but said: "It is common knowledge that the management at Fusion is looking for a new partner and there is certainly a good fit for what we do."
Fusion previously signed a five-year capacity deal with SVB which expires at the end of this year, fuelling speculation of a split. It is understood, however, that SVB will continue to provide capacity for Fusion for a further year.
Geoff Crisp, director of Fusion, said: "SVB has had a number of issues while Fusion continues to perform excellently, so it is not surprising that people are talking. We will listen to any proposals put before us."
The sale of Fusion could be disastrous for SVB, which continues to be plagued by long-tail US liabilities stemming from 2000 to 2001. The group reported a £110m loss in its end of year results in March - the worst in Lloyd's.
SVB declined to comment.