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UK regulator cracks down on travel insurance exclusions

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The UK’s Financial Conduct Authority (FCA) has proposed new rules to help consumers with pre-existing medical conditions access travel insurance.

Up to 14.1 million UK consumers with pre-existing medical conditions look to buy travel insurance each year, the FCA estimates. Of these, about 0.7% are declined cover and 11% are hit with exclusions around their conditions.

FCA Executive Director of Strategy and Competition Christopher Woolard says the proposed changes would reduce the number of customers who are “overpaying significantly” for travel cover.

But the Association of British Insurers says a “more targeted approach” should be the FCA’s aim. Its Director of Regulation Hugh Savill warns the proposals would “sweep up every single medical condition, however slight its impact on a premium”.

“Travellers need a more proportionate approach, which avoids confusion and disruption to the customer journey,“ Mr Savill said.

The FCA, which is consulting on draft plans until September 15, proposes a new “signposting” rule under which insurers must alert consumers when cover is declined or cancelled mid-term due to a pre-existing condition, or when cover is offered with an exclusion that cannot be removed or where a consumer is offered cover with an additional loading due to their condition.

The changes would provide consumers access to a directory, offering them alternative travel insurance companies willing to provide cover, the FCA says.