WRITTEN QUESTION E-2314/99

by Bartho Pronk (PPE-DE) to the Commission

(13 December 1999)

Subject: Motor-car insurance in foreign countries

In a number of EU Member States, including the Netherlands, motor car insurance policies restrict the option of remaining in a foreign country, typically for any period of more than three months, in some cases of as little as eight weeks. The reason is that a vehicle insured in those countries may remain in a foreign country for only a limited continuous period. This situation can amount to a restriction on the right of residence in another country the more so in that it generally is not possible to get insurance in the country of temporary residence because the vehicle is not registered in that country.

1. Is the Commission aware of this situation?

2. If so, does the Commission take the view that these arrangements restrict the free movement of employees and the free movement of persons?

3. Which countries are in this situation and which are not?

4. What action will the Commission take on this matter?

Answer given by Mr Bolkestein on behalf of the Commission

(13 January 2000)

The Commission is aware of the commercial practice mentioned by the Honourable Member but it does not have accurate information about the specific insurance undertakings involved in the different Member States.

As provided in the Third Motor Insurance Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles(1) Article 2: all compulsory insurance policies against civil liability arising from the use of vehicles must cover, on the basis of a single premium, the entire territory of the Community. Insurance undertakings are not therefore allowed to exclude any Community territory from their coverage. However, according to the principle of freedom of contracts established in national legislation, a number of insurance undertakings agree in their policies that the contract shall expire after the insured person has stayed for a certain period of time in another Member State. They consider that a change of residence of the insured may require a re-evaluation of the risk involved. It is clear that in this context the insurance undertaking should reimburse the policyholders the excess of premium paid as a consequence of the anticipated termination of the contract.

The termination of the insurance contract when the insured person changes his or her residence to another Member State seems justified since the car must be registered in the new Member State of residence and the risk is considered to be located in the country of registration according to the insurance directives. The insurance coverage should not present special problems in this case. The insurance may be covered by the same insurance undertaking or another one authorised to operate on free provision of services from their home Member State or by any undertaking established in the new Member State of residence.

The fiscal legislation, which establishes the obligation to register cars in the Member State of residence, provides for constraining deadlines for registration in order to ensure the payment of motor taxes. It is desirable that insurance contracts take account of such deadlines. However it is not reasonable to expect the insurance policies to become a permanent safeguard permitting policyholders indefinitely to delay the registration of their cars beyond the established deadlines.

A different situation is when the insured has not really changed his or her residence to another Member State but is only abroad on a temporary basis for professional or private reasons. In this case the anticipated termination of the insurance contract may be troublesome for the insured who may have difficulties to find an alternative insurance contract for a temporary stay abroad. The insurance policies should not leave European citizens uncovered in such situations.

The Commission, which is setting up a working group on the modernisation of the motor insurance directives with the participation of the Member States, will look at the situation mentioned by the Honourable Member and will consider any possible action.

(1) OJ L 129, 19.5.1990.