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An interesting article
appeared in the Insurance Times about the ongoing issue
about whether Travel Agents should be regulated.
The basis of the article is about how
insurers themselves are not joining in the debate -
some key extracts from the article:
Changes to the regulation of the sale
of travel insurance were first introduced in January
2005. The Government minister Paul Boetang, decided
that a partial exemption of regulation would be permitted
until mid-2007 when travel insurance is sold in connection
with a flight or a holiday (known as a connected contract).
It is believed that this decision came
about after intense lobbying by the Association of British
Travel Agents (ABTA) which felt that its members would
be unable to meet the new stringent regulation when
they cam into effect.
This exemption effectively means that
all ABTA registered distributors selling travel insurance
in conjunction with a holiday or flight are exempt from
meeting the same stringent FSA regulations that apply
to FSA regulated firms (insurance companies).
In other words, the rules apply to
insurers and brokers when selling routine holiday travel
insurance, but not the travel agents.
Insurers and brokers are regulated
by the FSA, which means they provide advice to their
clients, ensuring they are sold the right policy for
their needs and make the customer aware of any important
points such as disclosing pre-existing conditions.
Following the introduction of the new
regulation, which applies to brokers and insurance companies,
consumersnow receive four times more documentation -
such as policy wording, policy summary, demands and
needs and initial disclosure - htan previously when
buying a policy through a regulated channel.
However, because ABTA members cusrrently
do not need to comply with the same regulation, consumers
receive an inconsistent level of documentation if buying
travel insurance through a travel agent.
In July 2006, a Which? report into
travel insurance reinforced industry concerns by uncovering
some shocking examples of the sale of travel insurance
by some travel agents. According to the report, in some
cases this was ill advised or inappropriate for the
customer's needs, and in many cases "over-priced"
when compared to similar products direct from insurers.
The Which? report suggests that quality
cover couldn't be further from some travel agents' minds.
If consumers aren't getting the cover they expect or
need, or worse still, choose to travel without any cover
at all because they perceive it as being too expensive
on top of the cost of the flights and accomodation,
this reflects extremely badly on the industry as a whole.
All travel insurance policies identify
the insurer as the point of contact for complaints if
a claim is declined, leaving travel agents and ABTA
with a clear conscience - and the insurance industry
as the fall guy.
Here is a list of FSA regulated online
Travel insurance companies that
will provide you with a cheap quote instantly online.
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