Forwarders win total insurance exemption

AFTER lobbying, the UK government has agreed that freight forwarding and its associated activities will be completely removed from the Insurance Mediation Directive.

In 2007, the IMD Exemption for freight forwarders came into force, enabling freight forwarders to extend their open cover policy without the need to register with the Financial Services Authority (FSA) in order 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, i.e. trading companies that would be moving cargo for business and profit-making reasons.

Those forwarders which offered to sell insurance to 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.