HC Deb 27 February 2003 vol 400 c388
4. Tony Cunningham (Workington)

If he will make a statement on his forthcoming report on travel insurance regulation. [99465]

The Financial Secretary to the Treasury (Ruth Kelly)

I presume that my hon. Friend is asking about the recent consultation on whether travel insurance sold as part of a package with a holiday should be regulated by the Financial Services Authority. The Government are currently analysing the responses to the consultation on "Regulating Insurance Mediation". The consultation closed on 31 January. I will make an announcement on the outcomes of that consultation, including whether or not travel insurance sold with a holiday should be included in the scope of FSA regulation, in the second quarter of the year.

Tony Cunningham

I thank my hon. Friend for that reply. Given that in 2001 the financial ombudsman said that one in eight of all insurance complaints related to travel insurance, and that last year complaints about travel insurance increased by 14 per cent., does my hon. Friend agree that we need to regulate to protect the consumer buying travel insurance, wherever it is bought from?

Ruth Kelly

I thank my hon. Friend for his comments. There has been an intense debate on this subject with those respondents who have come back to the consultation with diametrically opposite views. Many bodies are in favour of FSA regulation; many are against. We have to strike the right balance between, for example, the perceived benefits of creating a level playing field for firms selling the same product and the evidence that my hon. Friend puts before the House today against the perceived regulatory costs placed on travel agents, for whom travel insurance forms a very small part of turnover. I shall certainly take into account my hon. Friend's evidence when making the decision, which I shall announce in due course.