Economic Secretary to the Treasury, Ed Balls, has issued a call for evidence to be presented to Government on whether travel and tour operators selling insurance should come under statutory regulation.
Addressing the Treasury Select Committee General Insurance Regulation Enquiry, Balls said: "We need to get to the bottom of whether travel insurance sold with a holiday is being mis-sold."
The minister, who is touted to be the next Chancellor of the Exchequer, highlighted the need for travel insurers to be clear and transparent about consumers' cover in the event of a terrorist incident.
The call follows the launch of the Review of Travel Insurance in August.
Balls said: "In recent years there have been growing concerns from consumer groups and sections of the industry that the market is not working as well as it could, raising questions about whether regulation and appropriate redress should apply to the selling of travel insurance.
"We therefore need to get to the bottom of whether travel insurance sold with a holiday is being mis-sold, and whether we need to be doing more to educate consumers to consider the cover they want and ensure that they are properly informed."
Insurers and brokers have until February 2007 to submit evidence.
