Whitehall takes an uninsured holiday

The extra cost and red tape generated by the introduction of general insurance regulation last week might have been worthwhile if it were comprehensive.

Strangely, the sale of travel insurance by travel agents has been exempted. Strange because it is the one thing that everyone - except travel agents - wanted to come out of this untidy morass of EU-driven legislation. Strange, also, because the government could have added the regulation of insurance sales by travel agents to the legislation even though it wasn't included in the original EU directive.

The Financial Services Authority, which will oversee general insurance regulation, says that one of the rules it has to abide by requires it to avoid impeding the international competitiveness of UK financial services. How it would impede UK travel agents, who presumably do most of their business with British customers, is a bit hard to see.

Another of the FSA's rules is that any burden it imposes must be proportionate to the benefit it produces. Tell that to the vets who sell a few pet insurance policies, or removal firms that sell cover for goods in transit, which must now seek registration.

The Association of British Travel Agents is a powerful lobbying body, but surely the government can't be so worried that it will end up in court on the wrong end of an anti-competition writ that it is prepared to sacrifice unwary travellers to the risks of being under or improperly insured?

The Treasury says it will review the situation, but even if it decides to include travel agents in the legislation, it will still take years to go through.

It is expected to take two or three years for the FSA to include home reversion plans in the mortgage regulation implemented last Autumn.

In the meantime, travellers should consider buying good quality travel insurance from an FSA-regulated broker who takes the time to find out about their health and exactly what they will be doing on holiday and therefore what their insurance needs are. If you really don't have the time, money or energy to refuse the policy pressed on you by your travel agent, read the small print to make sure it provides the cover you need.

·Whether Norwich Union's new motor insurance scheme, which charges different rates according to the time of day you are driving, really cuts costs has yet to be seen. But one outcome is very easy to predict - a rapid increase in divorce!

Unlike pay-as-you-go mobiles, which have enabled errant spouses to take and make calls without any printed records that their irate partners could use as evidence in court, NU's pay-as-you-go insurance scheme is based on information collected by a black box installed in your car that records not only when you are driving but where. In great detail.

The specimen bill sent out by NU as an example of what customers can expect to receive every month (page 17) lists reams of roads where the imaginary policyholder had stopped and the times he was there. Philanderers beware.