WRITTEN QUESTION P-0592/02

by Marianne Thyssen (PPE-DE) to the Commission

(25 February 2002)

Subject: Compulsory civil liability insurance in respect of motor vehicles- obligation for insurance undertakings to accept applicants for insurance cover

Pursuant to Article 3 of Directive 72/166/EEC(1) on the approximation of the laws of the Member States relating to insurance against civil liability, each Member State has drawn up the necessary rules so that civil liability in respect of the use of motor vehicles normally based on its territory is covered by insurance.

In practice, however, it appears that certain insurance undertakings are often only willing to insure applicants who represent a low or very low insurance risk, the insurers basing their decisions chiefly on the statistical probability of a particular applicant giving rise to an insurance claim. Insurance undertakings are thus targeting niches in the insurance market where the risk of having to pay out on insurance claims is lowest and hence the opportunity for making a profit is greatest.

This sort of business strategy means that it is increasingly difficult for drivers who, from a purely statistical point of view, represent a greater insurance risk, e.g. young people and the elderly, to find an insurer who is willing to insure them, even though their actions have not yet given rise to an insurance claim. This has led in practice to an increase in the number of uninsured drivers, with all that this entails, such as an increase in number of cases of hit-and-run in the event of accidents and the exclusion of some people from using certain means of transport owing to one-sided arbitrary decisions by insurance undertakings.

Does the Commission not consider that such a policy on accepting applicants for insurance cover undermines the principle underlying the obligation to take out insurance, namely to provide for risk cover and risk-sharing? Is it planning, or is it willing, to present proposals for legislation to prevent such business practices? Does it not take the view that, in order to ensure fair competition on the internal market, insurance undertakings should be subject to a general obligation to accept any applicant who has not been banned from driving by a court, subject to certain conditions?.

(1) OJ L 103, 2.5.1972, p. 1.

Answer given by Mr Bolkestein on behalf of the Commission

(26 March 2002)

It is true that certain groups of people involving higher risks may only obtain motor insurance coverage at high cost. As the Honourable Member says, this can lead to uninsured drivers. However, where necessary, mechanisms have been created in some Member States in order to ensure that a cover for compulsory insurance is always available for all groups of drivers regardless of the risk. During the revision of the motor insurance directives currently being undertaken by the Commission, no expert from the Member States' administrations has suggested the necessity to establish a harmonised Community mechanism in this regard.

Furthermore, it should be noted that the contractual relationships between insurance undertakings (as well as any other financial institution) and their customers are based on the principle of freedom concerning contracts and prices, in such a way that none of the parties may be obliged to enter into an insurance operation. The third non-life insurance Directive (92/49/EEC)(1) introduced the freedom to set scales of premiums and abolished prior or systematic approval of scales and policies, including in motor insurance, the aim being to complete the Internal Market in insurance.

The Commission believes that a transparent and integrated Internal Insurance Market in which insurers really compete in the provision of motor insurance coverage will permit the citizens to find more easily insurance for their vehicles at a lower cost.

(1) Directive 92/49/EEC, OJ L 228, 11.8.1992.