FSA to regulate Connected Travel Insurance

by Gill Montia

Story link: FSA to regulate Connected Travel Insurance

The Financial Services Authority (FSA) has published a consultation paper setting out its plans for regulating Connected Travel Insurance (CTI), that is to say travel insurance sold alongside a holiday.

The FSA already regulates travel insurance bought directly from insurance firms and brokers, and the consumer group Which? has campaigned to extend the regulation to CTI for many years.

According to the consultation paper, the regulation will be based on high-level rules and guidance that aim to ensure that firms selling the insurance are fit and proper and appropriately resourced, and that staff are competent to undertake the business they do.

Customers will be expected to receive sufficient, clear, concise and consistent information about a firm’s services and products to be able to make informed choices.

Those seeking advice will need to receive good quality advice and be sold suitable products which take account of their circumstances and needs.

Finally a system of redress will need to be in place for occasions when problems arise.

Travel firms that want to continue selling CTI will have the option of becoming authorised by the FSA or acting as representatives of another authorised firm.

They may also acts as an unregulated introducer, but only in certain limited circumstances.

The FSA’s consultation period will continue until mid-March 2008 and CTI regulation will come into force from 1 January 2009.