Is travel insurance broken?

Regulators are looking to advisors for help fixing the travel insurance system.

Is travel insurance broken?
The Canadian Council of Insurance Regulators (CCIR) is looking to brokers, insurers and the public to help fix travel insurance in Canada.

"We have heard the concerns of the public and insurance brokerage community and know how important it is for consumers to have confidence in their insurance protection when they travel," said Carolyn Rogers, CCIR chair. "As a result, we have formed a working group that is currently undertaking research on travel insurance and we're inviting comments from the public."

The CCIR is making an examination of travel insurance one of its key priorities in 2015.

The CCIR includes representatives from every province and territory in Canada, and the new group intends to work with the Canadian Insurance Services Regulatory Organizations (CISRO) and with the insurance industry on the travel insurance issue.

The move was met with enthusiasm by the insurance industry.

"We welcome this initiative by the CCIR and are committed to work with them to ensure that consumers have the knowledge and information that they need to have confidence in the emergency travel health insurance they purchase" says Frank Swedlove President and CEO of the Canadian Life and Health Insurance Association (CLHIA).

Travel insurance has been in the spotlight lately, especially in November with the notable "million-dollar baby" story. A Saskatchewan mother who delivered her baby in Hawaii, as well as receiving subsequent care, racked up a reported $950,000 in medical bills. She had travel insurance through Blue Cross Saskatchewan, but her claim was denied.

The mother claimed she was allowed to travel by a doctor and bought insurance from an advisor, while Blue Cross said there were “more facts related to this story that prevent us from reversing our decision.”