In reply to owlart:
I think that the company is obliged to try to make sure that you have travel insurance, but I don't think there's any legal requirement for you to actually take it out. You may even have some insurance through bank account or home insurance; worth checking. There may be a contractual agreement; check the contract.
http://www.google.co.uk/search?q=compulsory+travel+insurance
When I've booked holidays in the last few years, the travel companies have always insisted that they need to know my insurance details, and the answer I always give them is, essentially, "piss off and mind your own business; I will have travel insurance, and that's all you need to know". There's an argument that they are asking for your details so they can help in the event that you lose your insurance details (I've seen the Asian tsunami cited as an example).
It strikes me as a bit of a scam to try to sell you insurance via their brokers, thus making more money on the basis of lethargy of the part of the customer.