The ABI has criticised FSA proposals to create "higher risk" products in its response to FSA Consultation Paper CP 160.
The ABI said it was concerned over the proposed description of certain types of medical insurance as 'high risk'.
The ABI added that it does not accept the proposal that income protection, critical illness and private medical insurance require additional safeguards in the sales process.
ABI head of general insurance John Parker, said: "The FSA has overstated the consumer detriment involved in the products it proposes to classify as 'higher risk'.
"Creating a specific category of products in this way, without any justification, will dissuade customers from buying them, and make it harder for them to be sold.
The response also centred on the FSA's proposal to give more protection to small business customers than other commercial customers. It said such protection adds to the guidance offered through the Financial Ombudsman Scheme.
Parker said: "The FSA has also yet to make the case for additional protection for small businesses. We need to see evidence of the problem if we are to have an open discussion about the costs of regulation to tackle it.
"In both cases the FSA's proposals go beyond the terms of the Insurance Mediation Directive it is implementing. We must not lose sight of the need to ensure that proposed regulation is cost effective and proportionate."
