Insurance for travel agents and travellers

The TIC was invited to attend a meeting of the Panel on Economic Services of the Legislative Council held on 22 November 2004 for the item "Protection for Outbound Travellers". During the meeting, TIC Chairman Mr Ronnie Ho brought up the idea or, more accurately, the wish to seek the consent of the Travel Industry Compensation Fund (TICF) Management Board to allocate 0.05% of the levy that it has collected to take out travel accident (bodily injury) insurance for travellers.

Back in 2000, when the TIC Board last studied the feasibility of a collective liability insurance planfor members, it adopted the recommendation of the Liability Insurance Working Group under the Outbound Committee that the relevant premium should be paid with the TICF levy. The Board therefore wrote to the Government to request that the split between the Council levy and the Fund levy be changed from 0.15% and 0.15% to 2% and 1% so that the TIC could use the extra 0.05% to pay the premium for the collective plan. However, the Advisory Committee on Travel Agents rejected the proposal on the grounds that the premium should be met from other means and not the Council levy. Since the TIC did not have the necessary resources, and there were practical problems in pro-rating and collecting payments even if travel agents were to share the premium, the Board took the Outbound Committee's advice that the collective insurance plan would be shelved for the time being.

On the other hand, since the 911 attacks of 2001 and the SARS outbreak in 2003, insurance companies have been increasing the premium and reducing the scope of coverage of travel agents' liability insurance policies. In January this year, the Board set up the Liability Insurance Study Group, of which Mr Ho is the Convenor, and started negotiations with the insurance companies again on the feasibility of setting up a collective liability insurance plan. During the process, it was discovered that there were a number of technical issues concerning the operation of travel agents, such as the safety precautions taken by individual agents and their overseas counterparts, that were of great concern to the insurance companies but beyond the TIC's control. The recent traffic accident in Taiwan has pushed the premium level further up and made negotiation even more difficult. A collective liability insurance plan for all members seems less and less possible.

The proposal that Mr Ho put forward on 22 November is to extend the protection that the TICF provides for travellers by using a portion of the levy collected to take out travel accident (bodily injury) insurance for travellers, not liability insurance for travel agents. It is hoped that by increasing the protection for travellers, the chances of members facing litigation could be reduced.

The proposal was put forward to arouse public concern and at the same time kick off discussion on the idea. Formal consultation has yet to be carried out. The TIC has been studying the matter and when its proposal is ready for consultation, it will be presented to the relevant parties for their comments.

( 2004-12-3 )