We have profound misgivings about the industry's handling of this information and its ability to keep its own house in order

Baroness Helena Kennedy, Head of the Human Genetics Commission

The HGC had said the moratorium, which it said should be enforced through legislation, should last at least three years, so that the evidence around the issue can be considered.

Baroness Helena Kennedy QC, head of the commission, said: "Our consultations have shown very real public concern on the issue of genetics and insurance.

"On the basis of the evidence we have received, we have profound misgivings about the industry's handling of this information and its ability to keep its own house in order."

It had also called for the ban to apply to policies worth more than �500,000.

But it has said cases where someone has a favourable - or negative - result from a genetic test and tells the insurer should not be included in the moratorium.

The HGC said there had to be "effective regulation".

It said: "Those who are affected by genetic conditions should not feel excluded from the normal benefits of society, which, it might be argued, includes access to insurance."

The HGC added that it was crucial to retain the public's trust in genetic testing, and said: "There is already some evidence that some people are put off taking genetic tests by the fear that they may be seriously disadvantaged as a result."

'Period of stability'

Mary Francis, director general of the ABI, said the ban on using genetic testing would allow for a "period of stability" while permanent arrangements were put in place.

She said the insurance industry recognised the "depth of public concern".

In a letter to Baroness Kennedy, she said: "This will have the effect of excluding genetic test results from underwriting other than for a small number of very high profile cases".

There had been concerns within the industry that people with a high genetic risk would buy large amounts of insurance.

The HGC says it will now look at how a future system, safeguarding the interests of insurers, people looking for insurance, and the general public might work.

Options include an almost complete ban on the insurance industry using genetic testing, which is the case in many European countries.

The HGC will also look at allowing a "limited use of certain results".

The commission's calls follow demands from the Commons Science and Technology Select Committee last month for a minimum two-year moratorium on tests.

And health ministers have promised action to ensure that the results of genetic tests are not used by insurance companies to discriminate against patients.

In a speech last month, Health Secretary Alan Milburn said: "In truth, right now scientific advances have gone ahead of some of the responses in terms of legislation.

"That needs to change and we will catch up."

He has said he is concerned about insurers using "profiling" - predicting whether people will die young or suffer from serious diseases.

'First step'

Mick McAteer, senior policy advisor for the Consumers' Association, said: "The HGC's recommendations are an excellent first step.

"The government, as it has previously indicated, must now immediately enforce a moratorium on genetic testing by insurers.

"Consumers have suffered at the hands of the life insurance industry too many times. On this issue, safeguards must be in place from the outset".

Delyth Morgan, chief executive of Breakthrough Breast Cancer said: "Our concern has always been that the added risk of exclusion from insurance and its potential consequences may act as a strong deterrent to women who would most benefit from testing.

"The decision whether or not to have a test is hard enough without these added complications."