Government announces changes to the regulation of the selling of travel insurance
The Economic Secretary to the Treasury, Ed Balls, announced on Wednesday (27.06.07) that the Government intends to give the Financial Services Authority (FSA) the responsibility for regulating the selling of travel insurance sold along with a holiday. The FSA at present only regulate travel insurance sold on a stand-alone basis.
Ed Balls, Economic Secretary said:
"Twenty million people are buying travel insurance each year, and some are putting themselves and their families at risk by buying travel insurance that may not cover their needs. This happens as consumers have a 'knowledge gap' when buying travel insurance, as they often do not understand what they are buying or what it covers.
"Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.
"I have therefore decided to make all travel insurance policies sold in the UK to be done through FSA regulated companies. This will come into effect from January 2009, following a further period of consultation. Consumers in the future buying travel insurance sold alongside their holiday will get the same core regulatory protection and rights as consumers buying stand-alone travel insurance do now."
The FSA will implement this change in principles-based and proportionate way, minimising the burden on those travel firms that do become FSA authorised.
For further information, take a look at the HM Treasury website.