It is thought that hundreds of agencies will have to stop selling travel insurance in the New Year unless they act now to comply with a change in the regulations.

The FSA will regulate all insurance sales in January 2nd replacing ABTA oversight of member’s sales, and agents will no longer be able to sell travel insurance with a holiday unless they take one of four options.

However, the bad news is that a recent survey revealed that one in five ABTA agents either do not understand the changes or have done nothing to prepare themselves for the changes.

The new regulations could mean bad news for travel agencies, as it is thought that they could miss out on £7,000 a year in commission.

Agents may still offer insurance, but they cannot sell it themselves – as an introducer- appointed representative or “unregulated introducer” of a regulated firm. The latter means the agents do not have to register with the FSA, whereas the former does.