The Institute of Insurance Brokers has called for a regulatory distinction between advice-driven and “non-advised” sales of travel insurance...
The Institute of Insurance Brokers (IIB) has called for a regulatory distinction between advice-driven and “non-advised” sales of travel insurance.
This would allow travel agents' exemption from regulation to continue, as long as they made it clear to consumers that they were selling the product without any advice.
In a letter to the Treasury, IIB director general Andrew Paddick wrote: “The sale of travel insurance should not be left totally unregulated in the UK, because it can cause consumer detriment, especially if policyholders do not have access to the FOS and FSCS.
“We do not believe however, that travel agents and tour operators who do not provide ‘insurance advice' (ie. those that only effect ‘non-advised' sales of travel insurance — which should be robustly disclosed so that consumers are under no illusions regarding the risks involved) should be subjected to the full rigours of FSA regulation as it applies to insurance brokers for example. There could be a special low-cost FSA permission with minimum rules/ regulations for arranging travel insurance only on a non-advised basis.
“If travel agents and tour operators intend to give ‘advice' on travel insurance, then they should be fully regulated by the FSA, because they should have to demonstrate that adequate staff training and competence schemes are in place, that they have professional indemnity insurance to cover any erroneous advice/arrangements, etc.”
The IIB was responding to the Treasury Select Committee General Insurance Regulation Enquiry's call for evidence on whether travel and tour operators selling insurance should come under statutory regulation.
