Connected Travel Insurance and Regulation

The Financial Services and Markets Act 2000 gave the FSA responsibility for the regulation of financial services industries. In January 2005 this was extended to incorporate General Insurance. However, certain elements of the General Insurance industry were excluded, including Connected Travel Insurance.

In December 2007 the FSA released Consultation Paper CP07/22 titled “Regulating Connected Travel Insurance.” It confirms the FSA’s assumption of responsibility for the regulation of Connected Travel Insurance from 1st January 2009 and lays out initial proposals as to how this might happen.

These proposals have now been finalised. The broad implications for companies selling travel insurance that are not currently FSA regulated or ‘exempt’ are significant. Regulation will affect many areas of company operations: Corporate Governance and Management processes, Training, Recruitment, Sales, Call Centres, Customer Relationship Management and record keeping to name but a few. Companies becoming regulated for the first time in particular normally need to go through something of an acclimatisation process!

The significance of the proposals means that preparation should not be left to the last minute as the business impact may be significant.

If you are not clear as to how you will manage Connected Travel Insurance after the 1st January 2009 then you need to act immediately.