ABTA
has only bought agents a couple of years’ exemption from having to join the
Financial Services Authority, the boss of a leading underwriting firm has
warned.
Speaking
at the Travel Industry Insurance Conference in London last week, Travel and
Personal Underwriters managing director Jill Carnie said the Treasury’s
decision to allow ABTA to regulate its members’ sales of travel insurance is
unlikely to last beyond January 2007, when the opt-out comes up for review.
Carnie
said: “I saw what happened when the Treasury introduced two sets of regulations
in the life and pensions sector. It
didn’t
work. You cannot have a situation where the client is being sold the same
policy in two different ways.
“It
is wrong to allow ABTA to regulate insurance sales. It will lead to confusion
among customers and it’s not sustainable.”
Towergate
Group marketing director Paul Dyer warned that joining the FSA was not easy for
companies that specialise in insurance, never mind those for which it is a
secondary product. There is a 30-page application form, plus two 30-page
appendices to fill in.
It
is also expensive. The fee for businesses with less than £1 million turnover is
£1,100, rising to £24,500 for companies with turnover in excess of £25 million.
On top of that there is an annual fee and training costs from £125 per person.
Dyer
said high-street brokers are protecting themselves by joining networks created
by underwriters, but warned that was not an option for companies that sell
insurance as a secondary product.
“We
are not going to appoint agents as representatives because if they make a
mistake we go to prison, and we are not prepared to risk that,” he said.
ABTA
head of finance Mike Monk said he was sure the association would be allowed to
continue to regulate its members’ travel insurance sales after 2007.