AFTA UP­DATE

Travel Daily - - News - From Jayson West­bury

THEY say there is never a dull mo­ment in pol­i­tics, but from my per­spec­tive, the same can be said about the travel in­dus­try. I say this as a re­sult of the re­forms that may be tak­ing place within the travel in­dus­try off the back of the Hayne Re­port (The Bank­ing Royal Com­mis­sion).

Most, I am sure, would not have thought that travel would end up in the spot­light, but as it turns out, travel in­sur­ance and in fact the abil­ity for travel agents to of­fer con­sumers pay­ment de­fer­ral op­tions are un­der re­view.

The Fed­eral Trea­sury is cur­rently in a deep-dive re­view of what is known as Add-On In­sur­ance (AOI), and travel in­sur­ance is the largest form of AOI in the econ­omy. In essence, the gov­ern­ment is con­sid­er­ing im­ple­ment­ing rules and new ar­range­ments in the process of the sale of travel in­sur­ance which may im­pact on travel agents and other sup­pli­ers of travel in­sur­ance. Im­por­tantly, the gov­ern­ment is in a con­sul­ta­tion mode, and AFTA has pro­vided a de­tailed sub­mis­sion in re­sponse to the call made by Fed­eral Trea­sury.

CLICK HERE for the sub­mis­sion. AFTA has made the crit­i­cal points that the cur­rent sale ar­range­ments of travel in­sur­ance by travel agents of­fer good value for money and a com­pet­i­tive mar­ket­place. Travel in­sur­ance is well un­der­stood by con­sumers when a travel agent is in­volved, and any change to this process may im­pact in a way that would leave many out­bound Aus­tralian travellers un­der-in­sured or with­out a fit-for-trip pol­icy.

These are all very im­por­tant points and we hope that this work AFTA is ad­vo­cat­ing for will en­able the gov­ern­ment to see its way clear to en­able a statu­tory ex­emp­tion for the travel agent sales process from the pro­posed changes.

It is a very tech­ni­cal area of the econ­omy, and in­sur­ance of all kinds are well and truly in the sights of the gov­ern­ment as a part of the many re­forms be­ing pro­posed by the Hayne Re­port.

We will be tak­ing a very close watch as this process un­folds as we do see a clear and present dan­ger of change re­sult­ing in bad out­comes for Aus­tralians.

The sec­ond cur­rent is­sue un­der re­view is the sale by re­tail­ers (travel agents fall­ing into this cat­e­gory) of fi­nan­cial prod­ucts that pro­vide con­sumers with de­layed pay­ment op­tions.

This is not a chal­lenge only faced by the travel in­dus­try as the Hayne Re­port rec­om­mended that the ex­cep­tion for re­tail­ers to of­fer these types of prod­ucts be with­drawn, mean­ing that only a per­son who holds a fi­nan­cial ser­vice li­cence would be able to of­fer such a prod­uct.

It is early days in the process and again, AFTA will be on the front foot re­view­ing and con­sult­ing with the fed­eral gov­ern­ment on what would be best prac­tice and suit­able out­comes for the good of the con­sumer.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.