Proposed new rules on how old insurance records are searched are a “missed opportunity” to ensure the industry honours its responsibility to sick and dying workers.

Not-for-profit campaign group the Association of Personal Lawyers (APIL) says new plans to make insurance companies search their historical records properly if a potential claim for compensation is being made against them are “wide of the mark”.

“For years people with terrible diseases have died without receiving their compensation because insurance records can't be traced,” explained APIL president Karl Tonks. “These proposed new procedures are still not tough enough and sick and dying people will continue to be denied the justice to which they are entitled“.

For injured or ill workers to successfully claim compensation, it must be established which insurers provided employers' liability cover at the time they were injured or exposed.

“Victims of asbestos-related disease can become ill many years after they are exposed at work, by which time the records can be harder to find. Sometimes they are never found and those people are left with nowhere to turn,” said Karl in response to a consultation by the Financial Services Authority (FSA) on new search procedures.

“Every insurer should have a tracing policy in place. But the FSA is silent on how it will enforce the rules and sanction firms which do not comply,” he said.