Advantage and the Guild of Travel Management Companies (GTMC) have joined train operators to offer insurance as an alternative to bonding as all agents selling rail tickets are now required to provide a financial guarantee.
The Association of Train Operating Companies (Atoc) was poised to announce the Travel Agents Reserve Insurance Fund (Tarif) as Travel Weekly went to press after the scheme went live this week.
The scheme offers a possible model for leisure agents who will require a flight-plus Atol under reformed consumer protection regulations from next year. A Department for Transport consultation document is due this month.
Tarif is the product of 18 months of talks between Atoc, the GTMC and Advantage.
It offers insurance against a default on payments to Atoc members, paid from a fund created by a levy on agencies’ rail sales.
Any Atoc-licensed agent can join the scheme rather than provide a bond.
A seven-strong management board, including representatives from Advantage, the GTMC and Abta, will oversee operation of Tarif – which will provide liability against a failure costing up to £22 million.
The levy should amount to no more than 0.36% of agents’ sales, collected via the Rail Settlement Plan. The annual admin costs are estimated at £50,000.
Atoc commercial director David Mapp said: “The cost of Tarif is quite a lot lower than procuring a bond. We worked in close co-operation with the GTMC and Advantage [to set it up].”
Not all eligible companies have chosen to join Tarif, as some enjoy attractive bonding deals. Leisure agents and financial advisers have expressed fears that the cost of insurance or bonding to meet flight-plus regulations could be prohibitive.