Holidaymakers with pre-existing medical conditions should find it easier to obtain suitable and affordable travel insurance with a new signposting service.
The Financial Conduct Authority (FCA) has previously found that some people face problems finding appropriate cover due to their medical histories.
Some are turned down, offered cover with exclusions for their condition, or are offered premiums they would find unaffordable.
To improve access to cover, the FCA is introducing new signposting rules and guidance.
It is hoped the changes could boost competition between travel insurance firms by improving consumer access and awareness, increasing people’s ability to shop around.
Firms will be required to signpost people with pre-existing medical conditions to a directory of specialist providers.
The Money and Pensions Service is setting up a directory that meets the FCA’s criteria.
Work to create the directory is expected to be completed by summer 2020.
The FCA, which previously consulted on the issue, has estimated up to 14.1 million people with a pre-existing medical condition look to purchase travel insurance each year.
Gareth Shaw, head of money at consumer group Which?, said: “This much-needed action from the FCA could save holidaymakers with medical conditions huge sums by directing them to the most affordable policies that best meet their needs.
“For too long we have heard from consumers left struggling to find suitable cover – so this is a crucial intervention.
“The FCA must now apply rigorous criteria to ensure only the companies offering appropriate travel insurance appear on the directory – and to review its effectiveness in providing the affordable and suitable policies that those with medical conditions desperately need.”
The FCA plans to review the changes in 12 to 18 months, when the new rules have bedded in.
The regulator said its requirements do not prevent other organisations from establishing similar directories that also meet its criteria.
Macmillan Cancer Support’s head of campaigns, Eve Byrne, said: “Today’s announcement is sorely needed for customers desperate for a break but struggling to access affordable travel insurance.
“This includes the thousands of people living with cancer who call our free support line each year for advice after being blindsided by sky-high premiums, often well into their recovery or with a doctor’s permission to travel.
“While a directory of specialist firms is a step in the right direction, mandatory signposting will only benefit customers with pre-existing medical conditions if there is appropriate and affordable cover available to them.
“The insurance market must change its approach to covering people with pre-existing conditions to ensure that people living with cancer can access a competitive range of options that appropriately meet their needs.”
Graeme Trudgill, executive director at the British Insurance Brokers’ Association (Biba), said: “Helping people that have pre-existing medical conditions to more easily access travel insurance is a key commitment in our 2020 manifesto.”
He continued: “Biba has been in discussions with the FCA about the development of our successful find-insurance services, and we are ready to make the changes required and will be looking to apply to be listed as a medical cover firm directory.”
Hugh Savill, director of regulation at the Association of British Insurers (ABI), said: “The vast majority of consumers can obtain travel insurance, including those with pre-existing medical conditions.”
He said that while the FCA’s changes to strengthen the current signposting measures are welcomed, plans must be worked through carefully and thoroughly.
Charles Offord, managing director of Co-op Insurance, said: “We’re really pleased that the FCA has introduced new signposting to help people with pre-existing medical conditions access more affordable travel insurance.
“Currently, a third of people struggle to get cover and, of these, three-fifths say it’s due to their pre-existing medical condition.
“Two years ago we launched travel insurance for people of any age and any medical conditions to address this need and the uptake has been significant. We, therefore, hope this latest announcement from the FCA encourages others to follow suit.”