Select Committee on European Scrutiny Thirty-Eighth Report






COM(02) 244

Draft Directive amending the Motor Insurance Directives.

Legal base:

Articles 47(2), 55, 95(1) and 251 EC; co-decision; qualified majority voting


Document originated:

10 June 2002

Deposited in Parliament:

19 June 2002


Department of Transport

Basis of consideration:

EM of 5 July 2002

Previous Committee Report:


To be discussed in Council:

Not known

Committee's assessment:

Politically and legally important

Committee's decision:

Not cleared: further information requested




    1. The four Motor Insurance Directives[12] established a single market in the field of motor insurance. In 1999 the Commission initiated consultations on the need to revise and modernise the Directives and in 2001 the European Parliament adopted a Resolution calling for a fifth Motor Insurance Directive.
    2. The document

    3. Following the consultations and the Resolution the Commission has submitted a draft Directive revising the Motor Insurance Directives. It is proposed that Member States should comply with the Directive by 31 December 2004. The draft has three aims:

    • to improve the protection of motor vehicle accident victims through compulsory insurance;

    • to increase convergence in the interpretation and application of the Directives by Member States; and

    • to provide solutions to common problems, creating a more efficient single market.

    1. These aims would be attained by the draft's proposals to:

    • make it easier for motorists to move between Member States, by clarifying that prohibition of border checks of insurance applies to vehicles with temporary or special registration plates and to certain low-speed vehicles;

    • make longer stays in another Member State easier, by requiring cover to apply in the whole of the EU for the full term of the policy for a single premium;

    • make it easier to purchase a vehicle in another Member State, by allowing such a private purchaser to insure the vehicle with an insurer in his home state;

    • make it easier to obtain insurance cover, by requiring an insurer to provide an end of contract claims record, useable throughout the EU, within 15 days (relevant also to easier movement between Member States);

    • ensure limits of cover are adequate, by updating compensation limits (from _350,000 to _1,000,000 per victim for personal injury and from _100,000 to _500,000 for property damage), by requiring compensation for pedestrian and cyclist victims even if at fault, by not allowing exclusion of compensation for a passenger who knew or should have known the driver was intoxicated and by prohibiting excesses in relation to third party compensation;

    • ensure claims can be made as easily and simply as possible, by requiring insurers to make a compensation offer, or give a reasoned rejection, within three months of a claim; by giving the right of direct action against the insurer, presently available only to victims from another Member State, to local victims; by proposals relating to the activities of insurers' claims representatives in other Member States; and by requiring Member States to extend to local victims the present facility for information centres to assist victims from another Member State to identify the local party's insurer; and

    • ensure provisions for compensating victims of uninsured and unidentified vehicle accidents are harmonised and effective, by requiring compensation for property damage and by requiring the insurance bureau in the Member State where the accident took place to pay compensation.

The Government's view

    1. The Parliamentary Under-Secretary of State, Department of Transport (Mr David Jamieson) tells us that the proposed measures are largely in accord with existing UK policy, although there may be some adverse effect on premiums because of the proposal for property damage compensation for the victims of unidentified vehicles. But the Minister says also that the Government has questions as to subsidiarity and the legal bases of parts of the draft, and he adds that consultation with interested parties and a Regulatory Impact Assessment are still under way. Finally he says negotiation in a Council Working Group on this draft has begun and is likely to last until the end of the year.
    2. Conclusion

    3. We accept that in principle the draft Directive would improve motor insurance provision in significant ways. But before clearing the document we will want to know:

    • what the views of the interested parties in the UK are;

    • what the findings of the Regulatory Impact Assessment are;

    • what view the Government takes on the issue of subsidiarity raised by the provision for a direct right of action against the insurer in purely domestic, as well as cross-border, cases and on how any such issue is to be resolved; and

    • what matters of principle relating to competence are raised by this proposal, and how any such issue is to be resolved.

    1. Meanwhile we do not clear the document.


12  Council Directive 72/166/EEC; Council Directive 84/5/EEC; Council Directive 90/232/EEC; and Directive 2000/26/EC. Back

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