No C 65/6 Official Journal of the European Communities 15. 3. 89 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Directive amending, particularly as regards motor vehicle liability 
insurance, First Council Directive 73/239/EEC, and Second Council Directive 88/357/EEC on 
the coordination of laws, regulations and administrative provisions relating to direct insurance 
other than life assurance and laying down provisions to facilitate the effective exercise of 
freedom to provide services and amending Directive 73/239/EEC 
COM(88) 791 final — SYN 179 
(Submitted by the Commission to the Council on 3 January 1989) 
(89/C 65/06) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Articles 57 (2) 
and 66 thereof, 
Having regard to the proposal from the Commission, 
In cooperation with the European Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas in order to develop the internal insurance 
market the Second Council Directive 88/357/EEC of 22 
June 1988 on the coordination of laws, regulations and 
administrative provisions relating to direct insurance 
other than life assurance and laying down provisions to 
facilitate the effective exercise of freedom to provide 
services and amending Directive 73/239/EEC ('), here­
inafter referred to as the 'second Directive', made it 
easier for insurance undertakings having their head 
office in the Community to provide services in the 
Member States, thus making it possible for policyholders 
to have recourse not only to insurers established in their 
own country, but also to insurers which have their head 
office in the Community and are established in other 
Member States; 
Whereas the scope of the provisions of the second 
Directive specifically concerning freedom to provide 
services excluded certain risks, the application to which 
of the said provisions was rendered inappropriate at that 
stage by the specific rules adopted by the Member States' 
(') OJ No L 172, 4. 7. 1988, p. 1. authorities, owing to the nature and social implications 
of such provisisons; whereas those exclusions were to be 
re-examined after the second Directive had been in force 
for a certain period; 
Whereas one of the exclusions concerned motor vehicle 
liability insurance, other than carrier's liability; 
Whereas, however, when the second Directive was 
adopted the Commission gave an undertaking to present 
to the Council as soon as possible a proposal concerning 
freedom to provide services in the area of insurance 
against civil liability in respect of the use of motor 
vehicles (other than carrier's liability); 
Whereas, subject to the provisions of the second 
Directive concerning compulsory insurance, it is appro­
priate to provide for the possibility of large risk 
treatment, within the meaning of Article 5 of the said 
Directive, for the said insurance class of motor vehicle 
liability; 
Whereas large risk treatment should also be envisaged 
for insurance covering damage to or loss of land motor 
vehicles and land vehicles other than motor vehicles; 
Whereas to ensure the continued proper functioning of 
the green card system and the agreements between the 
national motor insurers' bureaux it is appropriate to 
require insurance undertakings providing motor liability 
insurance in a Member State by way of provision of 
services to join and participate in the financing of the 
bureau of that Member State; 
15. 3. 89 Official Journal of the 
Whereas it is also appropriate to require insurance 
undertakings providing motor liability insurance in a 
Member State by way of provision of services to join and 
participate in the financing of the guarantee fund set up 
in that Member State to pay compensation to the victims 
of uninsured or unidentified vehicles; 
Whereas in order to ensure that third party claimants are 
not prejudiced or put to greater inconvenience where the 
motor liability insurer is operating by way of the 
provision of services rather than by way of an estab­
lishment Member States shall require that insurance 
undertakings intending to provide services in this 
insurance class shall nominate a claims settlement 
represntative to be responsible for the processing and 
settlement of third party claims, 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
For the purposes of this Directive: 
(a) 'first Directive' means Directive 73/239/EEC (l); 
(b) 'second Directive' means Directive 88/357/EEC; 
(c) 'vehicle' means a vehicle as defined in Article 1 (1) of 
Directive 72/166/EEC O; 
(d) 'bureau' means a national insurers' bureau as defined 
in Article 1 (3) of Directive 72/166/EEC; 
(e) 'guarantee fund' means the body referred to in 
Article 1 (4) of Directive 84/5/EEC (3). 
Article 2 
In Article 5 (d) of the first Directive the phrase 'risks 
classified under classes 8, 9, 13 and 16 of point A of the 
Annex' in the first paragraph of point (iii) is hereby 
replaced by 'risks classified under classes 3, 8, 9, 10, 13 
and 16 of point A of the Annex'. 
Article 3 
The second and third indents in the second paragraph of 
Article 12 (2) of the second Directive are hereby deleted. 
Article 4 
Article 22 (1) of the second Directive is hereby replaced 
by the following: 
(') OJ No L 228, 16. 8. 1973, p. 3. 
(2) OJ No L 103, 2. 5. 1972, p. 1. 
(3) OJ No L 8, 11. 1. 1984, p. 17. European Communities No C 65/7 
'1. Every establishment must inform its supervisory 
authority in respect of operations effected by way of 
provision of services of the amount of the premiums, 
without deduction of reinsurance, receivable by 
Member State and by group of classes. The groups of 
classes shall be defined as follows: 
— accident and sickness (1 and 2), 
— motor insurance (3, 7 and 10), 
— fire and other damage to property (8 and 9), 
— aviation, marine and transport (4, 5, 6, 7, 11 and 
12), 
— general liability (13), 
— credit and suretyship (14 and 15), 
— other classes (16, 17 and 18). 
The supervisory authority of each Member State shall 
forward this information to the supervisory auth­
orities of each of the Member States of provision of 
services.' 
Article 5 
The following Article 12a is hereby inserted in Title III 
of the second Directive: 
Article 12a 
1. This Article shall apply where an undertaking, 
through an establishment situated in a Member State, 
covers a risk classified under No 10 of point A of the 
Annex to the first Directive which is situated in 
another Member State. 
2. The Member State of provision of services shall 
require the undertaking to become a member of and 
participate in the financing of its national bureau and 
its national guarantee fund. 
The untertaking shall not, however, be required to 
make any payment or contribution to the bureau or 
fund of the Member State of provision of services in 
respect of risks covered by way of provision of 
services other than one calculated, on the same basis 
as for undertakings covering risks in class No 10 
through an establishment in that State, by reference 
to its premium income from that class in that State or 
the number of risks in that class covered there. 
3. The Member State of provision of services shall 
require the undertaking to ensure that persons 
pursuing claims arising out of events occurring in its 
territory are not placed in a less favourable situation 
as a result of the fact that the undertaking is covering 
a risk in class 10 by way of provision of services 
rather than through an establishment in that State. 
No C 65/8 Official Journal of the European Communities 15. 3. 89 
In particular, the Member State of provision of 
services may require the undertaking to nominate a 
representative resident or established in its territory 
who shall be responsible for the handling of claims 
and possess sufficient powers to bind the undertaking 
in relation to third parties and to represent it in 
relations with the courts of that Member State. 
The representative, who may be an employee of the 
untertaking, shall limit his activities on behalf of that 
undertaking to the handling and settlement of such 
claims. 
Notwithstanding Article 3, the nomination of the 
representative shall not in itself constitute the 
opening of a branch or agency for the purpose of 
Article 6 (2) (d) of the first Directive and the representative shall not be an establishment within 
the meaning of Article 2 (c) of this Directive.' 
Article 6 
Member States shall amend their national provisions to 
comply with this Directive within . . . months of the date 
of its notification (') and shall forthwith inform the 
Commission thereof. 
The provisions amended in accordance with this Article 
shall be applied within ... months of the date of the 
notification of the Directive. 
Article 7 
This Directive is addressed to the Member States. 
(*) This Directive was notified to member States on .. .