THE Financial Services Authority has backed down in
its bid to regulate insurance sales through travel agents after admitting there
is no evidence that policies are mis-sold.
Treasury officials have agreed that ABTA should
continue to regulate its own members selling insurance on a voluntary basis
when the FSA replaces the General Standards Insurance Council next year.
The decision is expected to save scores of smaller
insurance providers, who feared a change in regulations would drive customers
to the giant direct-sell insurers. It also means agents will avoid a raft of
red tape plus costs which could have run into thousands of pounds.
“We’re delighted with the news,” said ABTA chief
executive Ian Reynolds. “The FSA has accepted our argument that complaints of
mis-selling against retailers are very rare and regulation would be an unjust
burden. It’s a victory for the industry. Many agents wrote in to give their
view and the Government has listened.”
Preferential managing director Steve Nickerson said
the decision vindicated the industry’s view that regulation was unnecessary.
“Congratulations must go to ABTA for its hard work. It’s long been my view that
legislation would just be another burden for the trade.”
ABTA will now press ahead with the launch of its own
compulsory insurance exam, which must be taken by all consultants selling
travel insurance. It’s believed ABTA’s promise to introduce the test helped
sway the FSA’s decision.
ABTA is proposing to make the exam available to
non-ABTA agents, such as Travel Trust Association and Global members, to
demonstrate to consumers it is an industry-wide qualification.