Licensing Condition on Travel Insurance



For more information: please click here.


About the Additional Licensing Condition

What is it about?

With effect from 15 Jul 2015, all travel agents will be required to inform outbound consumers to consider purchasing travel insurance that insures against its own insolvency and to record their decision regarding the purchase of such insurance.

What is its purpose?

To educate and remind consumers of the measures they can take to safeguard their interests when making travel bookings.

Who is affected?

The licensing condition will apply to all travel agents arranging outbound leisure travel where on a per person basis, the deposit or payment before departure is $500 and more OR the total value of travel product(s) is $1,000 and more (including GST).

Who is not affected?

The licensing condition does not apply to bookings for:

  • departures from Singapore (e.g. inbound bookings)
  • travel products for business entities
  • leisure travel (on a per person basis) where less than $500 is to be collected as deposit or payment before departure OR the total value of travel product(s) is less than $1,000 (including GST).

What are outbound leisure bookings?

These are travel products for use in a personal capacity and where travel is out of Singapore.

Implementation of the Additional Licensing Condition

What do travel agents have to do?

Broadly, when arranging such outbound leisure bookings, every travel agent has to:

  • Inform the client to consider purchasing travel insurance for all the travellers to insure against the insolvency of the travel agency;
  • record the client’s decision and certain other particulars

For clients who wish to purchase such insurance, the travel agent has to either:

  • proceed to facilitate the purchase of such travel insurance (for TSAs who sell such travel insurance and), OR
  • refer the client to STB’s list of insurers carrying such travel insurance (for TSAs who do not sell such travel insurance and for non-TSAs).

For clients who do not wish to purchase travel insurance, they can proceed with the booking as per travel agent’s normal procedure. We understand that this requirement has different implications based on your mode of operations. Please refer to Annex A on suggested steps that travel agents can take to implement the licensing condition when arranging bookings, and Annex B for the evidence to show that the licensing condition has been fulfilled for some broad modes of operation.

What information must travel agents record?

Travel agents must record the following information:

a. Name of client;

b. Travel agent reference number (e.g. booking reference number, invoice number);

c. Names of travellers;

d. Client’s decision on travel insurance purchase; and

e. in some cases, certain particulars of the travel insurance purchased (mentioned under “Proof of Insurance Purchase” below).

Travel agents must also obtain the client’s acknowledgement through unique authentication. For physical acknowledgement, this means the client’s signature and the date. For other unique authentication, these may include the client’s acknowledgement via email and multimedia messaging.

The forms in Annex C and D are provided to ensure compliance with the new licensing condition.

Travel agents have the discretion to adapt these forms for the purposes of implementing the forms in their systems and processes (e.g. travel agents with online platforms). However, travel agents that deviate from the forms bear the risk of not complying with the licensing condition.

How long must travel agents keep the records?

Travel agents are required to keep the records for at least a year. These records can be kept in electronic or physical form.

How will STB check for compliance?

STB’s checks will include auditing a travel agent’s transactions with consumers and requesting for records to prove that they have informed consumers, and recorded their decisions and certain particulars on the purchase of travel insurance.

What if the client wants to purchase such travel insurance immediately after receiving the mandated information? 

If you are a trade-specific-agent (TSA) selling such a travel insurance product, you may immediately assist your client in the purchase.

If you are not a TSA nor sell such insurance, you should refer your client to STB’s list of travel insurance products that covers for travel agent insolvency. Once they have made their purchase, you should then seek and record the particulars of their insurance before collecting any deposit or payment. Non-TSA travel agents must refrain from soliciting any insurance business for any particular insurer and refrain from illegally acting as an insurance agent.

What if the client does not want to purchase such travel insurance now?

The decision to purchase such travel insurance should be left to the client. The travel agent should record the client’s decision. The travel agent should not force nor pressure the client to purchase such travel insurance. The travel agent may proceed with making the booking arrangement, as per normal, where the client:

a. wishes to purchase such travel insurance later; or

b. does not wish to purchase such insurance.

What if the client has already purchased travel insurance?

Record the client’s declaration and proceed with the booking arrangement as per normal.