Treasury launches travel insurance probe |
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Published
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Fri, 04 Aug 2006 14:10
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LONDON - The UK Treasury has launched a probe to investigate charges of mis-selling of travel insurance to vacationers. The probe will be led by economics secretary Ed Balls and will examine a loophole in the rules which allows insurance sold by travel agencies to bypass Financial Services Authority guidelines, normally applicable to banks and insurers.
The probe will publish its findings early next year. It will also look at the option of implementing "proportionate" regulation by the FSA. This option was waived in 2003 due to concern that it would hike the prices of package holidays.
A recent survey conducted by consumer group Which? had warned that people opting for insurance as part of a package holiday were paying more than normal. The survey had found that the travel insurance policy for a single trip across the world for a family of four was atleast £200 more at a travel agency than elsewhere.
"Millions of British families have worked hard all year to pay for their summer holidays and are hoping they pass off without a hitch. But thousands of holidaymakers will suffer cancelled flights, lost valuables and even medical problems," Balls said. "Our investigation will ask whether it's fair to put all the pressure on ordinary families to read the small print and ask the right questions to make sure they are properly covered. It will ask whether the travel industry should be doing more to ensure families are not left high and dry on their holidays and whether we need to strengthen regulation to protect them."
He added that the first step would be to collect all the evidence from consumers and industry experts. After this the probe will work out on what needs to be done.
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Britons miss out on their holidays 