The OFT is to launch a probe into the payment protection insurance (PPI) sector.
PPI has been lambasted by the Consumers' Association, the Citizens' Advice Bureau (CAB) and the press for its cost, poor claims record and history of mis-selling.
Jane Milne, the ABI's head of household and property insurance, said: "This is no big surprise, we knew the OFT's intentions before Christmas."
Milne said the ABI was in communication with the OFT and would help the watchdog where possible.
"There are some issues and we want to see better consumer guidance, which is why we are also working with distributors. This is a valuable product and we will be explaining the benefits."
She added ABI research showed 85% of PPI claimants were satisfied with the experience.
Simon Burgess, managing director of broker British Insurance said: "The ABI has not been critical enough - it is defending the interests of its members that have their noses in the trough. There is a monopoly situation here and brokers are not getting access to the market. I would like to see the OFT refer this to the Competition Commission."
The OFT will produce its report by the end of the year.