The British International Freight Association has claimed victory on the Insurance Mediation Directive after the UK government agreed that freight forwarding and its associated activities will be removed from the scope of the directive altogether.
Director general Peter Quantrill said: “The key word here is ‘altogether’. In 2007, we celebrated that the Insurance Mediation Directive Exemption for freight forwarders had come into force, enabling freight forwarders to extend their open cover policy without the need to register with the Financial Services Authority to provide insurance to their customers.
“However, the exemption granted in 2007 was only relevant in those instances when insurance was sold to commercial customers, ie trading companies that would be moving cargo for business and profit-making reasons.
“Those forwarders which offered to sell insurance to so-called retail customers, for example private individuals emigrating and shipping personal effects abroad, were still required to be registered with the FSA. Now the retail customer comes under the exemption like the commercial customer, the cost and administrative burden to our members of these regulations is lifted, which is especially good in these straitened times.”
Forwarders must accept certain obligations, including adopting the BIFA Code of Practice and signing-up to the Financial Ombudsman Service (FOS).