Treasuruy's decision for FSA to regulate travel insurance policies welcomed by Defaqto
Defaqto welcomes the decision by the Treasury for the FSA to extend the regulation of travel insurance policies to those sold by tour operators and travel agents, which will come into force in January 2009. Defaqto could never see any good reason for not treating all travel insurance sales under the same regulatory regime.
In terms of the detriment to the consumer of purchasing travel polices through tour operators and travel agents, Defaqto has for years consistently highlighted the additional cost involved, which in earlier years had been estimated to be as high as £250m.
In recent times the differential between the cost of standalone policies and those bought through tour operators and travel agents has narrowed substantially. However, the fact that the latter were not required to explain to their customers the key policy features and exclusions may have led to some customers not being sold policies suitable for them.
Commenting on the Treasury’s decision, Brian Brown, head of insight at Defaqto said:
“With travel agent turnover being hit by growing sales through the internet, it may not be too surprising that some travel agents will not wish to get involved with the world of approved persons, supervisory visits, detailed rulebooks and the like and may decide that it isn’t worth their while to continue selling travel insurance. They may decide to form partnerships with insurers and simply pass their customers over to third parties to arrange their travel insurance. Alternatively, they could move into other, non – regulated areas, such as airport parking and transfers.”
