Travel Insurance -
FSA Introduces New Travel Insurance Rules - 30/05/2008
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A new set of rules to protect customers taking out travel insurance from travel agents has been introduced by the Financial Services Authority (FSA).
The regime which comes into full effect on the January 1, 2009 will require travel agents seeking authorisation from the FSA for selling travel insurance.
Travel agents currently sell insurance to travellers without authorisation provided the policies are bundled with holidays.
But the main problem with the practice is that insurance policyholders often complained that they were not fully told what the policies meant and what they could or could not cover. People also did not have the same rights when complaining.
But the new regime will ensure that travel agencies dealing in travel insurance have their staff trained in selling the product.
To help consumers with their decision, clear, concise and consistent information about a company’s services and products will be given to them. They could also obtain redress if things were to go wrong.
Director of retail policy at the FSA, Dan Waters explained that firms need to be fully ready for the regulation, which is only seven months away from take off.
“We start accepting applications next months and firms are advised to apply early to ensure that they are ready in good time for the start of the new regulation next January,” he said.
The rules, he added, were designed to introduce a proportionate, risk-based regulatory regime for the sale of travel insurance, which will also secure protection for customers.
The Association of British Insurance’s Kelly Ostler-Coyle also hailed the new system as one that would bring in a level playing field, where consumers can truly compare insurance across the agents and direct from insurance companies.
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