Law firm opposes decision by the Treasury to regulate travel agents.
Reynolds Porter Chamberlain (RPC), the City law firm, has slammed a decision by the Treasury to extend the FSA’s regulatory regime to cover the selling of travel insurance along with a holiday.
Jonathan Davies, partner of Reynolds Porter Chamberlain, said: “This is another example of regulatory creep. Hardly a single year has passed by since the FSA was established in which they have not broadened the scope of their regulatory regime.
“What the financial service industry desperately needs is a period of stability, to allow all the previous layers of regulatory change to bed down. However, the Treasury seems determined to keep churning up the water.”
In January 2004 insurance sold along with a holiday was exempted from the FSA regulatory regime whilst travel insurance sold as a standalone product was covered by the FSA.
Davies added: “Nothing has changed since January 2004 so this has to be an implicit acceptance that the original decision to exempt some travel insurance sales but not others was wrong. The Treasury went previously went as far as to negotiate an exemption for travel insurance purchased with a holiday from the EU’s Insurance Mediation Directive.”
He insisted the timing of the announcement was particularly odd as the FSA, in March, announced that the market for standalone travel insurance was over-regulated and that rules might be capable of being relaxed.
