Another insurance crackdown by the government
Most consumers in the UK have heard about the controversy over a type of insurance known as payment protection insurance, which has been heavily scrutinized and criticized by the government. It has now been revealed that regulators in the UK are looking into another common type of insurance cover, which is travel insurance, and are planning a crackdown that should increase the protection received by consumers that purchase travel insurance cover.
The latest crackdown relates to travel insurance cover that is sold by travel agents, and this is a sector that will soon be regulated by the government to ensure greater protection for travellers. This type of travel insurance cover is sold alongside holiday packages by travel agents, and regulators want to ensure that insurance cover is actually suited to the needs of the traveller. This is why the Financial Services Authority will now be stepping in to help regulate this sector.
A treasury spokesperson stated: 'Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.'
There have been a number of complaints from consumers groups, travellers that have purchased travel insurance, and even some MPs with regards to the suitability of many travel insurance policies and whether they provide adequate protection for consumers. The decision to regulate the sector through the FSA comes as a result of these complaints. However, officials from the travel agency industry have stated that this type of regulation is not necessary in order to ensure that key changes are made to travel insurance policies and the way that they are sold.
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