FSA To Regulate All Sales Of Travel Insurance From 2009

O n January 1, 2009, major        will only be available for         changes will take effect to     purchase through FSA-regulated     alter the way travel            agents. Small travel agencies and  insurance is sold. The changes        tour operators may not be able to  will apply to companies selling       justify the expense or time        it as part of a holiday package,      involved in the complicated        such as travel agents, tour           process of complying with FSA      operators, coach companies and        regulations. These companies may   airlines. It will also affect         have no alternative but to refer   outlets such as retail shops,         their clients to FSA-regulated     chemists, supermarkets and the        brokers and agents.                Post Office. Many of these                                               companies are already in              The news has not been welcomed by  compliance with government            many package holiday operators,    regulations to sell other             some of whom believe their agents  products. However, a double           are suitably trained and           standard has existed regarding        qualified to sell the insurance.   the way they have sold insurance      However, evidence suggests that    because 'stand-alone' companies       not all companies have done such   (which only sell travel        a good job. The government has     insurance) have been required to      been under pressure to enact this  comply with FSA regulations since     new law because of past            2005.                                 insurance-related problems. Many                                         consumers were exposed to          The UK's financial watchdog, the      potential harm while travelling    Financial Services Authority          because they were not properly     (FSA), will take over regulation      advised of the limitations of the  of the sale of travel insurance       policies they were purchasing.     in the United Kingdom as of                                              January 2009. From January 1, it      One of the most significant areas  of concern has been regarding         bound by strict FSA principles     exclusions for pre-existing           and guidelines which require that  medical conditions. If a policy       customers must be treated fairly   is sold without the disclosure of     and have access to a structured    pre-existing medical conditions       complaints handling process. They  the result could be the denial of     will also have the benefit of the  all related claims in the event       services of the Financial          of a problem. Another area that       Ombudsman should any disputes      has caused concern has been           arise which cannot be settled      failure to inform customers that      directly with the company.         they may need to obtain                                                  additional cover for hazardous        Those travelling to European       sports activities. Some policies      Union member countries are         only cover activities organised       advised to obtain the European     and arranged by the tour operator     Health Insurance Card (EHIC)       or representative. When insurance     before departure. However, the     is sold as part of a holiday          EHIC is not a substitute for       package, customers may,               taking out a separate              understandably, focus on the          comprehensive travel insurance     excitement and anticipation of        policy. The EHIC is of use in      the holiday and not pay due           medical emergencies and accidents  attention to the terms and            where free or low cost treatment   conditions of the insurance           may be available in participating  policy. Unfortunately, many do        countries. However, it does not    not find out until it is too          provide cover for the myriad of    late.                                 problems that can arise during                                           travel, such as lost luggage,      FSA regulation will translate to      theft of valuables, cancellation   a much more efficient service for     and curtailment of the trip, and   customers. The seller will be         emergency repatriation. Many       people are not aware that neither     percent of travellers depart on    a private policy nor the EHIC         trips without taking out           will provide cover for those who      insurance. This translates into    travel abroad with the specific       millions of uninsured and          intention of obtaining medical        vulnerable people visiting         treatment.                            foreign countries each year. It                                          is hoped that consumer confidence  Once FSA regulation is in place       in the insurance industry and      to oversee the way insurance is       general awareness of the           sold, customers are sure to be        importance of travel insurance     better informed before they set       will receive a boost once it has   off. Currently, it is believed        been stamped by the impressive     that approximately ten to fifteen     footprint of the FSA.              About the Author Jean Andrews is a freelance writer living in the UK. She regularly contributes articles for TIA Ltd who offer travel insurance at great prices online. Published At: www.Isnare.com