Millions of UK holidaymakers will receive greater protection while abroad when they take out insurance from travel agents and tour operators thanks to a stricter regulation regime by the government.
The Financial Services Authority (FSA), the UK’s financial watchdog, will be given the power to regulate all sales of travel insurance by the government, meaning all tour operators and holiday agents who sell travel insurance as part of a package will be required to follow FSA legislation.
The government's move to crack down on the sale of travel cover, a market believed to worth around £670 million in 2006, follows criticism by consumer lobby groups and politicians that many holidaymakers were purchasing inadequate cover .
Ed Balls, economic secretary to the Treasury, commented: "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."
"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," he added.
According to Mr Balls British tourists currently have a "knowledge gap" and often do not understand what they are actually buying.
Meanwhile travel firms that decide not to seek FSA authorisation will be able to sell insurance on behalf of a regulated company .
The new regime will come into effect in January 2009.
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British Watchdog To Regulate Travel Insurance Sales Thu, 28 Jun 2007      Recommended linksYour online travel shopTravel agents quick enquiry Travel insurance deals Looking for a bargain holiday? Do Not Be Fooled By Offers of Free Travel Insurance Brits Warned Over Cheap Travel Insurance |
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