Travel insurance to be regulated

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Agencies which sell travel insurance alongside holidays are set to answer to the Financial Services Authority in a move which will give consumers greater protection.

The new rules, which come into place next year, will mean that holidaymakers are able to seek redress if they have problems surrounding their holiday or booking.

Stand-alone travel insurance is already regulated, but travel agents, tour operators, airlines, ferry companies, train companies and accommodation providers often make available travel insurance connected to travel arrangements as a service for their customers which has not been regulated.

"Our rules are designed to put in place a proportionate, risk-based regulatory regime for these sales of travel insurance, securing protection for customers," said Dan Waters, director at the FSA.

Some companies have voiced their concerns that the new rules will mean that some firms will no longer offer connected insurance.

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