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Insurance fears as travel firms fail to apply for FSA authorisation

FSA - Financial Services Authority

Only four travel firms have applied for authorisation by the Financial Services Authority to sell travel insurance from 2 January 2009 and there is no indication how many may stop selling insurance as a result. The deadline for applications is 14 November.

 

The FSA will regulate all travel insurance sales from the start of 2009, replacing the existing regime that allows travel association ABTA to oversee its members' sales of insurance. The change means consumers will no longer be able to buy insurance when they purchase a holiday unless their high-street agent, tour operator or online retailer acts as the appointed representative of an insurer or insurance broker.

 

No one at the FSA or ABTA knows how many retailers and tour operators will have appointed-representative status, but ABTA expects most brokers and insurers to limit the number of firms they appoint to five - as more brings an added regulatory burden.

 

Travel agents can also act as introducer-appointed representatives and direct customers to a broker or insurance company as part of a commercial relationship. But again, ABTA has no idea how many members have chosen this route. Otherwise, agents will be able to do no more than recommend that clients obtain insurance.

 

For travel agents and tour operators it is a criminal offence to be dealing in insurance if not authorised.

 

Travel insurance: News update: November 2008

 

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