UPDATE 1-UK insurers give thumbs down to contigent convertibles

* ABI says its members want new hybrid out of bond indexes

* Investors may be forced sellers if bond converts to equity (Adds more detail)

LONDON, Nov 10 (Reuters) - The Association of British Insurers (ABI) said on Tuesday its members were against including a new type of hybrid bond, so-called contingent convertibles, in bond indexes.

Contingent convertible bonds are designed to convert into equity if a bank comes under stress and breaches certain triggers.

"Our members are strongly opposed, at this present time, to these instruments being included in bond indices," the ABI said in a statement.

Bank of America Merrill Lynch said on Monday that the bonds would qualify for inclusion in its bond indexes, reversing an earlier decision not to include them.

"We have changed our position and will not exclude contingent capital securities," the bank said in a research note.

The ABI said if contingent convertibles were included in indexes this would "effectively require some bond investors to buy these instruments and subsequently to become forced sellers if and when they convert into equity".

"We therefore think Merrill Lynch should reconsider its decision as a matter of urgency," Peter Montagnon, ABI's director of investor affairs, said in the statement.