TRAVEL agents who sell insurance as a secondary activity will not have to open a separate account for insurance premiums under new membership rules released by the General Insurance Standards Council.
In a major U-turn, the GISC admitted that trying to separate money taken to pay for a holiday from insurance premiums would be too complicated and would not add to consumer protection.
It has also slashed its minimum fee from £300 to £200 where commission income is below £200,000 and relaxed its requirements on training.
Chief executive Chris Woodburn said:”We are moving away from the idea of exam-based training towards point-of-sale training sponsored by the industry.” He said the changes meet some of ABTA’s concerns about the impact of the GISC on its members.
However, he emphasised that the board still opposes ABTA’s plan to act as regulator of its members on behalf of the GISC. “The board is against fragmentation of regulation,” he said.
The GISC will launch on July 3, four months later than planned, but it will be voluntary until it gets approval from the Competition Commission. Woodburn said this could take 15 months.
“Once cleared, we will become mandatory and at that point agents who do not abide by our rules will be thrown out and I do not believe they will be able to sell travel insurance,” he said.
The GISC code, practice requirements and disciplinary procedures will be published in the rule book in May.
ABTA head of finance Mike Monk said the association is still concerned about the requirement for £1m professional indemnity cover and it wants a new concession on commission disclosure to apply to all members. Under the new rules, agents will not have to tell clients how much commission they earn if they sell insurance from only one provider.