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INSURANCE intermediaries are questioning the credibility of ABTA’s travel insurance exam after it was revealed that many agents are continuing to sell policies even though they have not yet qualified.
Under ABTA’s code of conduct, any agent who wanted to sell insurance with a holiday was supposed to have passed level one of the training, or an equivalent exam by September 30. However, three weeks after the deadline, many agents have yet to sit the exam.
Thomas Cook and Thomson, which both opted out of the ABTA scheme to provide their own exam, said all their agents will have qualified by the end of the year – three months late.
Journeys Travel Insurance managing director Patrick Chong said: “I have always supported what ABTA is trying to do with this exam, but by allowing the deadline to drift it has lost credibility.”
He added: “Those who have done it are wondering why they abided by the rules when others have not.”
Citybond Suretravel sales director Iain Chalmers said three agents called in the week of September 30 to ask what the insurance exam was. He said: “That’s worrying, because if we had three, how many more are there who don’t know?”
He added: “I know of other agents who took the exam three or four months ago but still don’t know the results. According to the code, if you haven’t passed, you can’t sell insurance. However, ABTA is making exceptions for them. It has become a nonsense.”
An ABTA spokeswoman admitted the situation is not ideal and said there is concern that agents apparently still do not understand that ABTA introduced the training to prevent the industry being regulated by the Financial Services Authority. She said ABTA will go ahead with its plan to mystery shop agents to ensure they comply with the code, but results will be cross-referenced to check whether those who have been visited registered to take the exam.
Those who have made no effort to sign up staff will be sent a letter telling them they should not be selling travel insurance. Fines could follow for those who continue to ignore the code.
Travel Weekly asked a couple of industry insiders for their thoughts on the exam.
Andrew Brownrigg, owner, Haslemere Travel, Haslemere, Surrey
“Three of our seven staff have passed level one of the insurance exam and one has passed level two, so we are compliant according to the new regulations. They all said it was tough, which is a good thing. There’s no point in doing an insurance exam if it’s too easy. The staff also said some of the questions were ambiguous.
“Although I understand the need to be professional and responsible in selling travel insurance, I have a problem with the new regulations. We used to sell quite a lot of travel insurance as a stand-alone product, to clients who had used an air miles scheme or booked a holiday on the web. Now we can’t do that any more.
“We can only sell travel insurance as part of a holiday. This does seem very silly and clients see it as just more bureaucratic red tape.
“We have got things sorted out now – we refer these clients to our intermediary. But for the first six months after taking the exam our travel insurance sales fell so much I was considering whether it was worth continuing to offer it.
“It might have been better to join the Financial Services Authority, but I haven’t looked at the cost. In a normal year we make £7,000 to £8,000 in commission from sales of insurance. It’s a nice earner, but probably not enough to justify joining the FSA.”
Di Baker, owner, Wellington Travel, Aldershot, Hampshire
“I decided right at the start that my staff and I would take the ABTA travel insurance exam. It is required by ABTA, and if you are a member you should heed what your association says. Also, I followed ABTA’s negotiations with the Financial Services Authority and therefore I do understand the implications of being regulated by the FSA.
“We have four staff in the agency. We have all passed level one; my assistant manager and I have also taken level two. We both failed first time, which was a shock after so many years in the industry, but I passed on a re-sit. I was too cocky and didn’t read the questions properly. It was annoying not to know what I had failed on. Apparently, it would cost too much if we were to be supplied with that information.
“Level one is pretty basic. Anyone who fails that should not be selling travel insurance. It’s not difficult. Everything is covered in the workbook, so it’s important to study it.
“The main reason for doing the exam is to comply, but in hindsight I can see it was also a good refresher. There were questions in level two that I couldn’t answer.
“If agents have to be regulated from 2007, I will look at the cost versus what we make on travel insurance commission. If it’s not worth it for us, I will stop selling travel insurance altogether. That would be a shame, as we do offer good-quality insurance and can give clients advice. They can’t get that on the Internet.”
