Proposal for a European Parliament and Council Directive on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Directives 73/239/EEC and 92/49/EEC (Fourth Motor Insurance Directive) (97/C 343/07) (Text with EEA relevance) COM(97) 510 final - 97/0264(COD)

(Submitted by the Commission on 13 October 1997)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 57 (2) and 100a thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social Committee,

Acting in accordance with the procedure referred to in Article 189b of the Treaty,

Whereas, differences currently exist between provisions laid down by law, regulation or administrative action in the Member States relating to insurance against civil liability in respect of the use of motor vehicles and these differences form an obstacle to the free movement of persons and of insurance services;

Wheres, it is therefore necessary to approximate those provisions in order to promote the functioning of the single market;

Whereas, by Directive 72/166/EEC (1) as last amended by Directive 90/232/EEC (2), the Council adopted provisions on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles, and to the enforcement of the obligation to insure against such liability;

Whereas, by Directive 88/357/EEC (3), as last amended by Directive 92/49/EEC (4), the Council adopted provisions 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;

Whereas, the European Parliament, by its resolution of 26 October 1995 on the settlement of claims arising from traffic accidents occurring outside the claimant's country of origin (5), took an initiative pursuant to the second paragraph of Article 138b of the EC Treaty calling on the Commission to submit a proposal for a European Parliament and Council Directive on this matter;

Whereas, it is a fact appropriate to supplement the arrangements established by Directives 72/166/EEC, 84/5/EEC (6) and 90/232/EEC in order to guarantee motor vehicle accident victims comparable treatment irrespective of where in the Community accidents occur; whereas, for accidents occurring in a Member State other than that of the victim's residence, there are gaps with regard to the settlement of victims' claims;

Whereas in order to fill such gaps at least in part, it should be provided that the Member State where the insurance undertaking is established require the undertaking to appoint representatives resident or established in the other Member States to collect all necessary information in relation to claims resulting from such accidents with sufficient powers to represent the under taking in relation to persons suffering damage from such accidents, including the payment of compensation and to represent it or, where necessary, have it represented in relation to such claims before the courts, in so far as this is compatible with the rules of private international law on the determination of jurisdiction, and before the authorities of the other Member States;

Whereas the appointment of representatives responsible for setting claims is one of the conditions for access to and carrying on the activity of insurance listed in class 10 of title A of the Annex to Directive 73/239/EEC; whereas that condition is covered by the single official authorization issued by the authorities of the Member States where the insurance undertaking establishes its head office, as specified in Title II of Directive 92/49/EEC; whereas this condition also applies to undertakings having their head office outside the Community which have secured an authorization granting them access to a Member State of the Community; whereas Directives 73/239/EEC and 92/49/EEC should be amended and supplemented accordingly;

Whereas the existence of a direct right of action against the insurer for the party who has suffered loss or injury is a logical precondition for the institution of such representatives and moreover improves the legal position of victims of road accidents occurring outside that party's Member States of residence;

Whereas, in addition to ensuring that there is an intermediary representing the insurance undertaking in the State where the victim resides, it is appropriate to guarantee the specific right of the victim to have the claim settled promptly; whereas it is therefore necessary to include in national law appropriate penalties to be imposed on the insurer if his representative fails to fulfil his obligation of making an offer of compensation within a reasonable time limit; however, it is a condition that liability and the damage and injury sustained should not be in dispute, so that the insurer is able to make an appropriate offer within the prescribed time limit;

Whereas victims of traffic accidents sometimes have difficulty in establishing the name of the undertaking providing insurance against civil liability in respect of motor vehicles involved in an accident; whereas in the interest of such victims, Member States should set up information centres to ensure that such information is made available promptly; whereas those information centres should also make available to victims information concerning claims representatives; it is necessary that such centres should cooperate with each other and respond rapidly to requests for information on claims representatives made by centres in other Member States;

Whereas it is necessary to make provision for a body to guarantee that the victim will not remain without compensation where the insurer has failed to appoint a representative or is manifestly dilatory in settling a claim to provide that, in such cases, the victim should be able to apply directly to that body; whereas it is justified to confer on that body a right of subrogation in so far as it has compensated the victim; whereas, in order to facilitate enforcing that claim against the insurer, the body providing compensation in the victim's State should enjoy an automatic right of reimbursement with subrogation to the rights of the victim by the corresponding body in the State where the insurer is established; whereas the latter body is the best placed to institute proceedings for redress against the insurer;

Whereas it is necessary to have a body to ensure that the victim will not remain without compensation if it is impossible to identify the insurer of the vehicle; whereas provision must be made so that the ultimate debtor in respect of the damages paid to the victim is a body situated in the Member States where the non-insured vehicle which has caused the accidents is normally based,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Scope

The objective of this Directive is to lay down special provisions applicable to victims of accidents

(a) occurring in a Member State other than the State of residence of the victim, and

(b) caused by a vehicle

- insured by an undertaking established in a Member State other the State of residence of the victim, and

- registered in a Member State other than the State of residence of the victim.

Article 2

Direct right of action

Each Member State shall ensure that victims of accidents as defined in Article 1 of this Directive enjoy a direct right of action against the insurer covering the other party against civil liability.

Article 3

Claims representatives

1. Each Member States shall take all measures necessary to ensure that all insurance undertakings authorized in accordance with:

- Article 6 of Directive 73/239/EEC, as amended by Article 4 of Directive 92/49/EEC, to cover the risks classified in class 10 of point A of the Annex to Directive 73/239/EEC, other than carrier's liability, or

- Article 23 (2) of Directive 73/239/EEC,

freely appoint in each Member State other than in which they are established a body (hereinafter referred to as 'the claims representative`). The claims representative shall be responsible for handling and settling claims arising from accidents occurring in a Member State other than the State where the victim resides and caused by a vehicle insured by such undertakings and registered in a Member State other than the State where the victim resides. The claims representative shall be resident or established in the Member State where the victim resides.

2. Directive 73/239/EEC shall be amended as follows:

(a) The following subparagraph shall be added to Article 8 (1):

'(f) communicate the name and address of the claims representative they appoint in each of the Member States if the risks to be covered are classified in class 10 of title A of the Annex`;

(b) The following subparagraph shall be added to Article 23 (2)

'(h) communicate the name and address of the claims representative they appoint in each of the Member States if the risks to be covered are classified in class 10 of title A of the Annex`.

3. The claims representative shall, in relation to such claims, collect all information necessary in connection with compensation and shall take the measures necessary to negotiate a settlement of claims in accordance with the instructions of the insurer, the rules on compulsory insurance against civil liability as these rules are defined in the last indent of Article 2 of Directive 90/232/EEC and the rules on civil liability applicable to the accident. The requirement of appointing a claims representative shall not preclude the right of the victim or his insurer to institute proceeding directly against the person responsible for the accident or his insurer.

4. The claims representative shall be appropriately qualified. His facilities shall be such as to enable him to discharge the duties provided for in this Article.

5. The claims representative shall have sufficient power to represent the undertaking in relation to persons suffering damage who pursue claims, including the payment in full of such claims, and to represent it or, where necessary, to have it represented, before the courts concerning such claims in so far as compatible with the Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (7) and with the other rules of private international law on the determination of jurisdiction, and before the authorities of the Member State where he represents the insurer.

6. The Member States shall create a duty, backed by penalties, to the effect that, within a time limit of three months the date on which the victim presented his claim for compensation either directly to the insurer or to the claims representative,

- the insurer of the person causing the accident or his claims representative is required to make an offer of compensation, in cases where liability in not contested and the damages have been quantified, and

- the insurer to whom the claim for compensation has been addressed or his claims representative is required to provide an appropriate reply to the points made in the claim, in cases where liability has not been clearly determined and the damages have not been fully quantified.

7. The last subparagraph of Article 12a (4) of Directive 88/357/EEC shall apply.

Article 4

Information centres

1. Each Member State shall establish or approve a body (hereinafter referred to as 'the information centre`) responsible for keeping a register of motor vehicles registered in the territory of that State, insurance undertakings providing civil liability coverage for such vehicles and the claims representatives appointed by such undertakings in accordance with Article 3 whose name shall be notified to the information centre in accordance with paragraph 2, or for coordinating the compilation and dissemination of that information; the information centre shall also be responsible for assisting victims in identifying the name of motor insurance undertakings providing coverage for vehicles registered in that Member State and of the claims representatives notified to it.

2. Insurance undertakings providing coverage against civil liability in respect of the use of motor vehicles shall notify the information centre in the Member State in whose territory they are established of the registration numbers of the vehicles they insure which are registered in that State, the number of the insurance policy and the name and address of the insured. It shall notify the information centres of the other Member States of the name and address of the claims representative which they have appointed in accordance with Article 3 in each of the Member States and the corresponding information concerning vehicles registered in those countries which they insure by way of provision of services.

3. The Member States shall ensure that the victim of an accident occurring in a Member State other than the State where he resides shall be entitled to obtain from the information centre of the State where he resides or of the State where the vehicle is registered the name and address of the insurer, the number of the insurance policy and the name of the insurer's claims representative in the State of residence of the victim. If the vehicle is not duly insured, the information centre shall provide the victim with the name and address of the owner or usual driver of the vehicle.

Article 5

Compensation bodies

1. Each Member State shall establish or approve a body (hereinafter referred to as ('the compensation body`) responsible for providing compensation where damage to property or personal injury is caused to a victim residing in a Member State by a vehicle registered and insured in a Member State other than the State of residence of the victim and the accident giving rise to such damage or injury which occurs in a Member State other than the State of residence of the victim.

The compensation body in the State of residence of the victim shall take action if, within a period of two months from the date when the victim presents to the body a claim for compensation,

- the insurer of the vehicle causing the accident has failed to appoint a claims representative in accordance with Article 2, or

- the insurer or the claims representative has failed to make an offer of compensation, or has not provided a reply answering, with reasons, the points raised by the victim in his claim for compensation or has refused the claim for compensation without specifying the reasons on which the refusal is based within a time limit of three months from the date when the victim presented his claim for compensation, either directly to that insurer or to the claims representative, within the limits imposed by insurance obligations, as specified in the last indent of Article 2 of Directive 90/232/EEC, and in accordance with the national rules on civil liability applicable to the accident.

The compensation body in the State of residence of the victim shall inform the insurer of the person responsible for the accident or the claims representative that it has received a claim from the victim and that it will respond to that claim within a period of two months from the presentation of that claim.

2. The compensation body which has compensated the victim in his Member State of residence shall be entitled to claim the reimbursement from the compensation body in the State where the insurer is established of the sum paid as compensation within a period of two months of the date when the former body applied to the latter body for reimbursement.

Consequently, the compensation body in the Member State where the insurer is established shall be subrogated to the victim in his rights against the person responsible for the accident or his insurer in so far as the compensation body in the Member State of residence of the victim has provided compensation for the loss or injury suffered. If the insurer's compensation for the victim is fixed by a court ruling, acknowledgement of the debt or mutual agreement, the insurer may only challenge the reimbursement if he adduces evidence that the body has failed to inform him of the complaint in accordance with paragraph 1 hereof or that it has mistakenly accepted unfounded claims for compensation of has overvalued the loss or injury. The compensation body in the State of residence of the victim and the compensation body in the State where the insurer is established may also claim reimbursement of expenses reasonably incurred.

3. Each Member State shall take the measures necessary to ensure that the compensation body in its territory provides reimbursement within the time limit specified in paragraph 2 of this Article to a compensation body in another Member State which has reimbursed the victim of an accident caused by a vehicle covered by an insurance undertaking established in the first Member State in the cases provided for in the second subparagraph of paragraph 1 of this Article.

Article 6

Cases where the insurer cannot be identified

If it is impossible to identify the insurer, the vehicle shall be treated as uninsured. Compensation for damage to property or personal injury causes to the victim shall be provided by the body within the limits laid down in Article 1 (4) of Directive 84/5/EEC. The victim shall be compensated by that body in the Member States where be resides. The body shall then have a claim, on the conditions laid down in Article 5 (2) of this Directive, against the body in the Member State where the vehicle in question is normally based or, depending on the circumstances, against the green-card bureau in that Member State.

Article 7

Implementation

1. The Member States shall adopt and promulgate the provisions necessary to comply with this Directive within 18 months of its notification and shall forthwith inform the Commission thereof. They shall apply these provisions within 24 months of the date of the notification of this Directive.

2. The Member States shall communicate to the Commission the texts of the necessary provisions of national law which they adopt in the fields covered by this Directive.

Article 8

Entry into force

This Directive shall enter into force on the . . . day following its publication in the Official Journal of the European Communities.

Article 9

Penalties

The Member States shall fix penalties for breaches of the national provisions they adopt in implementation of this Directive and take the steps necessary to secure their application. The penalties shall be effective, proportional and dissuasive. The Member States shall notify these provisions, together with any amendments thereof, to the Commission not later than the date mentioned in Article 7.

Article 10

Addressees

This Directive is addressed to the Member States.

(1) OJ L 103, 2. 5. 1972, p. 1.

(2) OJ L 129, 19. 5. 1990, p. 33.

(3) OJ L 172, 4. 7. 1988, p. 1.

(4) OJ L 228, 11. 8. 1992, p. 1.

(5) OJ C 308, 20. 11. 1995, p. 108.

(6) OJ L 8, 11. 1. 1984, p. 17.

(7) OJ L 299, 31. 12. 1972.