Agents will not have to join the General Insurance Standards Council for at least 12 months because of the new Competition Act that comes into force next month.
Speaking at a travel insurance symposium in London last week, GISC chief executive Chris Woodburn said failure to launch the self-regulating body by the February deadline means it will have to start as a voluntary organisation.
“There is no doubt the planned mandatory regime is anti-competitive so we will have to show the Competition Commission that it is in the interests of consumer protection,” he said.
Woodburn said the process could take up to 15 months but admitted that if it is referred to the European Union, it could take years. “It does weaken our position but gives people time to get used to the idea of regulation,” he added.
Woodburn had previously wanted everyone involved in the sale of insurance, including travel agents, to join GISC but had to scrap the February deadline when it was inundated by objections, including those from ABTA, which wanted to act as regulator on behalf of its members.
“My view, and the Government’s, is that there should be a single regulator, so it is unlikely that we would pass a sector over to another regulator but it is still on the agenda and we are talking to ABTA,” he said.
Thomas Cook head of new product development Ian Morgan said the delay was good news for agents, who were not consulted despite having a 70% share of the travel insurance market.
“ABTA regulation has worked effectively so if we want to join GISC, it must add value and at an acceptable cost,” he said. “We see no reason why the proposed travel agent fees are four-times higher than those levied on insurers.”