Eleventh Report Contents

Proposed Negative Statutory Instruments under the European Union (Withdrawal) Act 2018

Instruments recommended for upgrade to the affirmative procedure

Motor Vehicles (Compulsory Insurance) (Amendment etc.) (EU Exit) Regulations 2019

Date laid: 14 December 2018

Sifting period ends: 15 January 2019

1.The EU Motor Insurance Directives enable UK residents who are victims of motor traffic accidents in another EEA Member State to make claims in the UK against the insurer (or its claims representative) or from the Motor Insurers Bureau (MIB) as the UK’s appointed Compensation Body (“the visiting victims scheme”). The MIB estimates that 5,000 UK road traffic victims make claims via the visiting victims scheme each year. Of these 5,000, 4,300 are made against insurers and 700 made against the MIB. In the event of ‘no deal’ with the EU, reciprocal arrangements with other EEA Member States are not guaranteed. The MIB would retain responsibility for compensating UK residents injured in an EEA state without the ability to claim reimbursement from that country. The MIB would also have to continue reimbursing EEA countries for claims made by EEA residents injured in the UK. The obligation on insurers based in the EEA to appoint a claims representative would also cease. The Government estimate that this could result in cost exposure for the MIB, which would result in costs being passed on to insurers, and in turn, to motorists. Therefore, this instrument removes the Compensation Body requirements from the MIB. UK residents who have already commenced court proceedings against the MIB prior to exit day will be able to continue pursuing visiting victims claims. The Department for Transport (DfT) anticipates “more UK residents issuing legal proceedings from November 2018 to exit day in order to ensure their claim can continue to be made in the UK” and estimates that this “could be up to 240 personal injury cases” resulting in the average levy increasing by £15,000.1 Victims of road traffic accidents in the EEA will continue to be able to pursue claims for compensation, but will now need to do so in the Member State where the accident occurred. In the absence of an agreement with the EU, all UK motorists will be required to carry a “Green Card” (an international certificate of insurance issued by insurance providers in the UK) guaranteeing that the motorist has the necessary third-party motor insurance cover for travel in the EU. DfT estimates that “between two to four million individuals may need a Green Card.” Green Cards are obtained free of charge from insurance providers; however, the DfT has explained that “insurance providers can decide to reflect production and handling costs in a small increase to their administration fees.” DfT has also stated that they “expect that drivers crossing into Ireland from Northern Ireland will need Green Cards just as all UK drivers will in order to drive in the EU.” Given the impact of these changes on UK motorists, the House may wish to debate the instrument. Therefore, we recommend that this instrument be upgraded to the affirmative resolution procedure.

Proposed Negative Statutory Instruments about which no recommendation to upgrade is made

1 The levy applied by MIB is member specific and is calculated based on the premium income for each member.

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