New law: Romanian tourism agencies have to fully insure clients' holidays

Travel agencies in Romania will be obliged to fully insure holidays for their clients in case they go bankrupt or insolvent, after the Romanian state banned franchised insurances, which only covered a portion of the loss for tourists, if the agency went insolvent, according to Mediafax newswire. So far, tourism agencies had the possibility to sign a franchise insurance contract with an insurance firm, which, in some cases, covered 80 percent of the insured amount. This meant that if a tourism agency went insolvent, it was to pay for 20 percent of its client's holiday, while the rest of 80 percent was up for the tourist to cover. Authorities estimated around 500 tourism agencies in Romania had such franchise insurance contracts, and many of them failed to let clients know about the risks. Many agencies were also paying the first installment of the insurance, then failed to pay the rest, which canceled the insurance altogether. With the legislative change, the state will also have a clear view of the tourism agencies active in Romania. Travel agencies have 60 days starting April 14 to send over a copy of their insurance policy to the National Tourism Agency ANT. Out of the 2,500 tourism agencies in Romania, some 1,500 are active, and around 200 of these had an expired insurance. editor@romania-insider.com