The huge gulf between the ABI and the vast majority of its members who responded is revealed in feedback to the Law Commission’s consultation paper, published last week.
The proposals would bring the law into line with the Financial Ombudsman Service’s approach to handling claims.
The Law Commission wants to abolish consumers’ legal duty to volunteer information, protect those who act honestly and reasonably and give insurers proportionate remedies for negligent misrepresentations.
The plans won the support of ABI members, brokers, consumer groups and the FOS.
But the ABI said: “There is no widespread evidence of consumer detriment and the need for reform is therefore not evident.”
It encourages insurers to follow the FOS approach in guidelines introduced in January but does not believe this should be written in law.
Scottish Re UK & Ireland chief marketing officer David Heeney says: “It is surprising to have what appears to be a weight of insurers differing in view from what their trade body is saying.”
Royal London head of corporate affairs Gareth Evans says: “It looks odd the vast majority of insurers’ responses are positive and the trade body says something different.”
Lifesearch research in March showed only 6 per cent of life offices and reinsurers thought the ABI was doing a good job representing its members. Head of protection policy Kevin Carr says: “It is good to know our research is being backed up with actions as well as words.”
ABI spokesman Jon French says: “Things have moved on and the fact we have introduced new guidelines has made a lot of what the Law Commission was proposing pretty irrelevant. We live in the real world where insurers have to be able to adapt with the changing environment. The ABI and its members have consistently argued that principle-based guidelines are the way to go.”