Agents escape new insurance ruling
No evidence of systematic mis-selling, says Government
Travel agents will not be subject to new government rules on the selling of holiday insurance – to the annoyance of consumer groups.
As from January 2005, general insurance, including travel insurance sold by providers direct to the public, will come under the auspices of the Financial Services Authority. However, according to a report in today’s Guardian newspaper, insurance sold as part of a travel package will not be regulated.
While around 80 per cent of travellers still buy their cover from agents, recent surveys have suggested holidaymakers can make large savings by buying direct.
The Treasury secretary Paul Boateng said that any benefits of implementing regulation for agents would be outweighed by cost, adding: “No evidence of systematic mis-selling of travel insurance was presented during the consultation process.”
However, the Consumers’ Association said there was “extensive mis-selling among agents”.
A spokesman for Direct Line, which has campaigned on the issue, told The Guardian the decision was a “huge blow to consumers and the insurance industry”, adding: “Millions of holidaymakers will continue to be at risk of being sold inappropriate travel insurance.”
The Government has promised to review the situation in 2007.
Read our previous stories:
17-Feb-2003 Alarm over mis-selling of insurance
9-Jan-2003 Holidaymakers warned off insurance from agents
20-Sep-2001 ABTA wins landmark appeal against new insurance regime
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