Abta has expressed ‘disappointment’ at the Treasury’s decision to give the Financial Services Authority the power to regulate the sale of all travel insurance products.
At present the FSA only regulates travel insurance sold on a standalone basis but from January 2009 it will also oversee travel insurance products sold with holidays.
Abta chief executive Mark Tanzer said: “I am very disappointed that the Treasury has chosen to take this step which could lead to an increase in the number of UK holidaymakers travelling without insurance.
“However, we will work closely with the Treasury to ensure that this new regime will minimise any negative impact and look to ways to allow the majority of our members to continue to offer this essential service.”
The economic secretary to the Treasury, Ed Balls, said the move was needed as there was a “knowledge gap” amongst consumers buying travel insurance as they often didn’t know what they were buying or what it covered.
Balls said: “Twenty million people are buying travel insurance each year and some are putting themselves and their families at risk by buying travel insurance that may not cover their needs.”
Abta said it had seen “no credible evidence” to back up such claims, although it welcomed the Treasury’s decision to introduce another consultation period before introducing the changes.