The Association of British Insurers has issued a bulletin, saying it “welcomed the announcement by the Economic Secretary to the Treasury, Ed Balls, of an investigation into the sale of travel insurance.”
The British are great users of packaged holidays and travel agents usually offer travel insurance as part of the package. The U.K.’s Treasury Department estimates that sales of these policies will reach £670 million ($1.278 billion) this year, which makes them big business.
However, “around half of all travel policies are sold under Financial Services Authority regulations, and half not,” said the ABI. It has therefore “endorsed the government’s decision to gather robust evidence about the impact on consumers, in order to decide whether changes are needed, fulfilling a commitment made to the insurance industry when FSA regulation was introduced.”
Stephen Sklaroff, Deputy Director General of the ABI commented: “The Financial Services Authority is already reviewing the regulations governing the sales of stand-alone travel policies, to ensure they work in the interest of customers. It makes sense for the government to review the unregulated half of the market at the same time. We need a balanced and proportionate system which gives all insurance customers the protection they need without adding unnecessary costs or red tape.”
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