Travel insurance sold with a holiday will be regulated by the Financial Services Authority

From 1 January 2009, the Financial Services Authority (FSA) will regulate connected travel insurance (CTI).

Travel firms often sell CTI alongside a holiday or other related travel. CTI may cover a single short or extended trip, or an annual multi-trip.

You will not be allowed to carry on CTI activities after 1 January 2009, if you have not applied to the FSA for authorisation by 15 November 2008, or become an appointed representative (AR).

This means that if you wish to continue to sell or be involved in CTI, you will need to decide whether to:

• Apply to the FSA for authorisation to sell CTI.
• Enter into an agreement with a principal already authorised by the FSA to act as their AR or an introducer appointed representative (IAR). Principals will hold regulatory responsibility for their ARs and IARs, who will not require separate authorisation.
• Stop selling CTI, in which case you will not need to be regulated by the FSA.
• Simply provide leaflets or other information about travel insurance without taking any further steps to arrange or sell CTI. In this case, you should refer to the FSA's perimeter guidance manual to check whether you qualify for exclusion from regulation.

Authorisation timetable

From 30 June 2008, you will be able to apply to the FSA for CTI authorisation.

If you apply to the FSA on or before 30 September 2008, you will be eligible for the early application discount. This will allow you to save 30 per cent off the application fee.

You must make your application for authorisation on or before 15 November 2008 to benefit from "interim authorisation". Only firms that meet this deadline can lawfully carry on selling CTI until the FSA makes a decision about their application, or until 31 December 2009.

Full title of regulation
Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2007 [SI 2007 3510]

Links

Find information on CTI for travel firms on the FSA website

Find out whether your CTI activities require regulation on the FSA website

Download the policy statement and final CTI rules from the FSA website (PDF)