The British Insurance Brokers' Association (Biba), has welcomed the Treasury review of the sale of travel insurance, announced last week.
Eric Galbraith, Biba chief executive said: “Self regulation of travel insurance through travel agents has not worked.”
Ed Balls MP, the Treasury Minister, launched the investigation, last week, to ascertain whether agents should be doing more to ensure customers weren't left “high and dry” when things went wrong.
The move comes because, whilst policies sold by Insurance brokers and intermediaries are regulated by the Financial Services Authority, those sold by travel agents are not.
Biba said that regulation should be imposed on travel agents to ensure consumers are afforded the same protection they receive from insurance brokers and intermediaries who are currently regulated by the FSA.
It also said it believes that many travel agents' and tour operators' policies are currently overpriced.
Graeme Trudgill, technical services manager at Biba, said: “We warmly welcome the news that the Government will investigate this loop hole that allows travel agents and other distribution channels to get away with inadequately insuring British tourists for their holidays. It is the job of all good insurance providers to ensure that their clients are properly covered."
