FSA to regulate all travel insurance
The UK Government intends to extend the responsibility of the Financial Services Authority (FSA) so that it regulates travel insurance sold with a holiday. It already regulates travel cover sold on a stand-alone basis.
Secretary to the Treasury Ed Balls says evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at guiding the customer through the sales process.
“I have therefore decided to make all travel insurance policies sold in the UK to be done through FSA-regulated companies,” he said.
The ruling takes effect from January 2009, following a further period of consultation. Treasury will implement the new structure in a transitional way, giving the FSA and the industry time to adapt to the new regulatory environment.
It has also exempted from regulation the selling of certain insurance by certain sectors – for example, some additional insurance sold by car hire companies, where the evidence shows a low risk of consumer detriment.
Travel companies deciding not to seek FSA authorisation will be able to sell travel insurance through appointed representatives.
Mr Balls says there are additional options for travel companies that may allow them to provide information on insurance for remuneration. As part of the consultation, he is seeking views on whether these freedoms are a viable way of continuing to offer insurance services.
Secretary to the Treasury Ed Balls says evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at guiding the customer through the sales process.
“I have therefore decided to make all travel insurance policies sold in the UK to be done through FSA-regulated companies,” he said.
The ruling takes effect from January 2009, following a further period of consultation. Treasury will implement the new structure in a transitional way, giving the FSA and the industry time to adapt to the new regulatory environment.
It has also exempted from regulation the selling of certain insurance by certain sectors – for example, some additional insurance sold by car hire companies, where the evidence shows a low risk of consumer detriment.
Travel companies deciding not to seek FSA authorisation will be able to sell travel insurance through appointed representatives.
Mr Balls says there are additional options for travel companies that may allow them to provide information on insurance for remuneration. As part of the consultation, he is seeking views on whether these freedoms are a viable way of continuing to offer insurance services.