Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 139: To ask the Minister for Finance if his attention has been drawn to the fact that there is no code of practice to protect consumers in the sale of travel insurance; and if he will ask IFSRA to consider fully this gap. [4140/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Under the EU Insurance Mediation Directive, travel agents who sell insurance only as part of a holiday package are specifically exempt from financial regulation. These agents are therefore not authorised and regulated as financial services providers by the Financial Regulator and do not come within the scope of the Consumer Protection Codes recently introduced by the Financial Regulator. The Financial Regulator does, however, publish information and advice on travel insurance for the benefit of consumers.

The Package Holidays and Travel Trade Act 1995 covers the holiday package but not the travel insurance that may be sold with it. The Financial Services Ombudsman has powers to deal with complaints which concern the conduct of the underwriting insurance company, in relation to claims about the actual policies themselves, but not the sales process of travel agents.

Any travel agent selling travel insurance that is not part of a package holiday, must be registered with the Financial Regulator as an insurance intermediary. I understand that such insurance is widely available, whether through travel agents or other providers and I would urge consumers to examine carefully the benefits of this option.

Under the Package Holidays and Travel Trade Act it is the Director of Consumer Affairs who has direct responsibility for enforcing consumer protection provisions dealing with information provided to the consumer before conclusion of a package holiday contract. There is an obligation under section 12(1)(c) of the Act for the travel organiser/retailer to provide the consumer with information on the minimum level of travel insurance cover where such insurance cover is compulsory under the holiday contract. If such insurance is not compulsory under the contract, section 12(4) also provides that the travel organiser will inform the consumer about the optional conclusion of an insurance policy to cover certain risks. Under the Consumer Protection Bill 2007, which was recently published by the Minister for Enterprise, Trade and Employment, it is proposed to transfer the functions of the Director of Consumer Affairs to the new National Consumer Agency.

I understand that the Financial Regulator and the Departments of Transport and Enterprise, Trade and Employment are currently in correspondence regarding the recommendation by the Financial Services Ombudsman in his Annual Report 2005, that a code of practice be adopted to cover how travel insurance is sold by travel agents. As Minister for Finance, I have no statutory function in regulating the activities of travel agents selling insurance as part of a package holiday.