The Treasury has revealed the FSA will not regulate travel agents who sell insurance as part of a package until 2007 at the earliest.
An announcement in Parliament from the chief secretary to the Treasury, Paul Boateng, this afternoon confirmed that travel insurance sold as part of a package will not be regulated, however this will be reviewed again in 2007.
Chief among other proposals was for the Treasury to give the Financial Ombudsman Service powers to deal with customer complaints regarding issues prior to the introduction of statutory regulation.
Boateng said: "No evidence of systematic mis-selling of travel insurance sold as part of a package was presented during the consultation process.
"Any benefits of regulation would be substantially outweighed by the cost of implementation. However in light of some concerns raised the government will review the market again in 2007."
Key outcomes of the consultation brought before Parliament today include:
Boateng added: "This legislation will benefit the millions of British consumers who purchase billions of pounds worth of general insurance polices each year. Consumer protection will be increased, safeguards introduced and minimum standards enforced.
"The government has worked closely with industry to design a regime that is targeted at maximising consumer benefit and will not load the industry and ultimately the consumer with unnecessary costs."
