The ABI has shelved a report it commissioned on separately funding employers' liability (EL) claims for long-tail diseases, according to liability market sources.
High level sources put the cost of the report, produced by PricewaterhouseCoopers (PWC), at £250,000, and dubbed it "an expensive failure".
The ABI commissioned PWC to look into the feasibility of establishing a separate fund for long-tail risks in 2003, after the release of the Department for Work and Pensions' (DWP) first report into the EL crisis in June 2003.
It was initially due to be completed in autumn 2003, according to the ABI head of general insurance John Parker. He has since left the organisation.
The report was delayed as the ABI chose to commission more research in order to present the DWP with an outline of how a separate funding model could work.
In April this year, Parker said that phase one of the report had already been completed. He said there had been discussions with interest groups such as the CBI, the Federation of Small Businesses, the TUC and the Engineering Employers' Federation.
At that time, Parker said that phase two of the report was due to be completed within weeks.
He said that after further discussions with the interest groups, a proposal would be presented to the DWP in May.
Sources said the proposal involved the creation of a separate company, funded by employers, to pay long-tail claims on a no-fault basis.
But an ABI spokesman said that the report was still not complete and was due to be finished sometime in the autumn.
"There are a number of issues we're still looking at," he said.
He said the ABI had "never committed to publish the report", which had been commissioned in order to establish the feasibility of separate funding.
The spokesman said he could not comment on the cost of the report.
Head of household and property Jane Milne is acting as head of general insurance until a replacement is found.
