HALF the UK’s travel agents risk being barred from selling travel insurance under new regulations coming into force next year.
The rules require everyone who sells insurance to be licensed by a new body called the General Insurance Standards Council, replacing the existing Association of British Insurers’ code of conduct.
To get a GISC licence, agents will have to show they are competent at selling travel insurance and pay a fee which is yet to be decided.
The GISC will carry out Mystery Shopper-style checks on agents to make sure they are meeting certain standards. If they are not, agents will be fined or banned from selling insurance altogether.
Association of Insurance Intermediaries and Brokers chairman Michael Slack said: “I think it will eliminate half of the agents selling now. I have yet to be sold travel insurance where the agent was concerned to tell me anything about the policy or cover.”
Slack predicted that agents will have to take an exam in the future and that within 10 years individuals, rather than an agency, will have to register.
“We are talking of a mega shake-up of the insurance selling industry. I am surprised and disappointed that this has not been taken seriously,” he added.
ABTAchief executive Ian Reynolds said: “This does have big implications for agents. If agents have got into bad habits or are sloppy at selling insurance, they had better watch out.”
It is believed the new rules will impact agents even more than the introduction of Insurance Premium Tax last April.
The GISC will start operations in January and agents are expected to need licences to sell from the spring.
The formation of this self-regulatory body for the insurance industry was agreed by the Government last July as an opt-out from Government regulation under the Financial Services Authority.
Association of Travel Insurance Intermediaries president David Hall said ATII members will make sure the agents they sell through are licensed.
“I don’t agree that half the travel agents selling insurance will have to stop, as people always find a way around these things,” he added.