The ABI has said it will be co-operating fully with the OFT in their study into payment protection insurance.
Nick Starling, the ABI's director of general insurance, said: "The FSA recently recognised the value of payment protection insurance in protecting against loss of income through redundancy and illness.
"The OFT's decision to carry out a market study should complement the work insurers and lenders are already undertaking to ensure that there is a good basic policy standard all customers can rely on. Together with the FSA, work is also in hand on further driving up selling standards."
