Nsupdate -l not using session.key

[Kalman Feher]

While testing bind 9.7.1 features including automated signing and
update-policy local. I encountered some strange behaviour using nsupdate -l.

When using nsupdate -l I was not able to update the zone in question and the
following error was generated:
update-security: error: client 127.0.0.1#9292: view internal: update
'star/IN' denied

However: 
nsupdate -k var/run/named/session.key
> server 127.0.0.1
Worked fine.

Note that the session.key is at the default location. Reading the 97ARM it
doesn't appear that I need to specify the location of this file, since its
created automatically where I and more importantly nsupdate expect it to be.

Any suggestions?
-- 
Kal Feher