The ABI has rejected calls from the Treasury Select Committee for a crackdown on travel agents and tour operators selling insurance.
In a report by the select committee the MPs said millions of tourists are at risk because policies exclude terrorist attack cover.
“All too often, exclusions are buried in the small pront of insurance policies. Holidaymakers are risking damage to their health or considerable financial loss if they require treatement abroad or repatriation to the UK.”
Biba last week said its research had uncovered significant abuses in the travel agent and tour operator market. It called on the Treasury to introduce legislation to the sector.
The ABI said a crackdown on the market was unnecessary. It proposed regulation of travel insurance sold through tour operators and travel agents, but believes it is important for customers to have choice about what insurance they buy.
Nick Starling, the ABI's director of general insurance, said: “The committee is wrong to call for a crackdown. It has produced little or no evidence to support its call.
“The committee draws attention to travel insurance sold by tour operators and travel agents who, unlike insurers, are not regulated. We believe that regulation through trading standards would provide sound protection for consumers without imposing unnecessary burdens on travel agents or the FSA.
"And by extending the Financial Ombudsman Service to cover these sales, all travellers would be guaranteed the same high level of protection.”
