Hundreds of travel agencies will have to stop selling travel insurance in January unless they act now to comply with a change in regulations. With Christmas and New Year, anyone who has not got their act together by now will be in trouble.
The Financial Services Authority will regulate all insurance sales from January 2, replacing ABTA oversight of members' sales, and agents will no longer be able to sell insurance with a holiday unless they take one of four options. Yet a survey of 1,500 ABTA agents suggests one in five either do not understand the changes or have done nothing to prepare.
The cost of FSA-authorisation makes it a non-runner for smaller agencies, so those planning to carry on selling insurance have to become the appointed representative of an insurer or insurance broker.
Agents may still offer insurance - but not sell it themselves - as an introducer-appointed representative or ‘unregulated introducer’ of a regulated firm. The former involves registering with the FSA and the latter not.
Travel Trust Association (TTA) members may act as introducers after the TTA obtained FSA authorisation. The TTA has seen 65 members complete applications to be unregulated introducers. The TTA is a travel trade association with 370 independent travel agency members. The TTA has negotiated policies with increased cancellation coverage and higher age limits. Members are being offered two methods of selling insurance. The first is through a TTA call centre which customers will be directed to call.
Alternatively agents selling online will be given a link to put on their sites.