The UK Treasury Department has officially handed over authority for regulating “travel insurance sold with a holiday or related travel” to the UK’s Financial Services Authority.’
The not unexpected decision (Discussions have been going on for some time – See IJ web site Feb. 26) comes after a number of incidents in which British travelers experienced difficulties in claims adjustment, as they weren’t properly covered by policies sold as part of holiday package tours.
The FSA said it would “review the proposals following the next stage of public consultation by HM Treasury. If the decision is confirmed, the FSA will itself consult with industry and consumer bodies towards the end of the year on the regulatory approach it would take.”
The Association of British Insurers welcomed the move, which it has long called for, to bring travel operators, who sell insurance coverage within the scope of FSA regulation. Such policies were originally excluded from the FSA’s mandate when it assumed authority over the UK’s insurance industry in 2005.
Nick Starling, the ABI’s Director of General Insurance and Health, commented: “It is right that customers should have the same level of consumer protection, regardless of how they buy their travel insurance. But the new regime must benefit consumers, and avoid adding costs in a competitive market.
“The FSA will need to ensure that the regulation of all travel insurance is proportionate to reflect the low level of potential customer problems associated with this product, and to ensure that consumers are not deterred from buying travel insurance,” he added.
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