Travel Agents Dispute FSA Insurance Regulation Proposals

by Robin Pilgrim, LawAndTax-News.com, London

28 February 2007

The Association of British Travel Agents (ABTA) has hit back angrily at the suggestion made in a Treasury Select Committee report that the Financial Services Authority should step in and regulate the provision of bundled travel insurance.

According to reports, the Committee argued that regulation of the insurance sold as part of holiday packages is not satisfactory, and that self-regulatory practices put in place by the travel industry are not sufficiently rigorous.

However, in a statement published at the weekend, the travel trade association announced that:

"ABTA disagrees with the Treasury Select Committee's recommendation that travel agents and tour operators be regulated by the Financial Services Authority. ABTA strongly disagrees with the Committee's view that there is clear evidence of consumer detriment for travel insurance sold by travel agents and tour operators."

"ABTA's Code of Conduct requires all ABTA Members to sell appropriate travel insurance to customers and all ABTA Members staff must have sat and passed an insurance training exam before they are allowed to sell insurance. The latest figures from ABTA show less than 0.02% of the complaints the Association received from consumers related to the potential misselling of insurance by its members."

It continued:

"FSA regulation would lead to a significant proportion of ABTA members choosing not to sell travel insurance, as regulation is both expensive and onerous. This would significantly reduce customer choice and lead to an increase in the 14% of customers who travel abroad uninsured."

"In addition it is very important that customers purchase cover at the same time as they book travel arrangements to ensure that they are protected for any potential cancellation charges prior to travel. Many will no longer have this option and be adversely affected as a result."

ABTA's Chief Executive Mark Tanzer confirmed:

"We fundamentally disagree with the Treasury Select Committee's recommendation. FSA regulation could only lead to more travellers being put at risk, which is clearly not the Committee's intention."

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