WRITTEN QUESTION E-2117/00

by Eija-Riitta Korhola (PPE-DE) to the Commission

(30 June 2000)

Subject: Setting of motorcycle insurance premiums in the Member States

In Finland the premiums for insuring motorcycles are particularly high. The reason for the cost of the premiums is of course the high accident risk associated with motorcycles. However, it appears that the insurance premiums of the various motorcycle categories are not targeted fairly in relation to the number of accidents in which each category is involved. In practice, the owners of larger motorcycles pay out a disproportionate amount for accidents involving smaller motorcycles.

Is the Commission aware of the premium-setting practice in Finland?

Does this practice, as described above, differ from that in other Member States?

Does the Commission see a positive solution to this problem which would make the allocation of premiums fairer? Does the internal market operate in such a way that a Finnish motorcyclist can take out insurance in another Member State in which the pricing is in a reasonable relation to the risk of the particular motorcyclist, taking account of his or her age, driving experience, place of residence and model and size of motorcycle?

Answer given by Mr Bolkestein on behalf of the Commission

(7 September 2000)

The commercial practice referred to by the Honourable Member is based on a criterion relating to the vehicle, i.e. its cylinder capacity, which is taken into account when insurance companies assess a risk. As far as the Commission is aware, the criterion of engine size or power is taken into account by insurance companies in most Member States, including Finland.

Fixing premiums is part of the commercial policy of all companies, and they are free to choose the criteria and methods for assessing loss ratios. The Commission cannot intervene in an area which is covered by the principle of contractual freedom, especially as the very core of the Community provisions in this area demands that premiums be determined freely by insurance companies on the basis of their own tariff criteria.

Community law, through the Third Non-life Council Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life assurance and amending Directives 73/239/EEC and 88/357/EEC(1), allows any insurer in a Member State to carry on class 10 insurance business in the field of compulsory third-party motor insurance in any other Member State, whether through a branch or under the freedom to provide services. Thus a motorcyclist may take out compulsory third-party liability insurance for a motorbike registered in Finland with an insurer established in a Member State other than Finland, provided that the insurer is authorised to do so by the Member State of origin and is also a member of the motor vehicle insurers' bureau and the Finnish motor vehicle guarantee fund(2). Membership of the two bodies is necessary in order to guarantee the operation of the green card system and compulsory motor vehicle civil liability insurance established by Council Directive 72/166/EEC of 24 April 1972 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(3), the Second Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles(4) and the Third Council 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(5). The legal framework enabling consumers to choose the insurance products that best suits them and the insurer they prefer, irrespective of the Member State of origin, is thus in place.

(1) OJ L 228, 11.8.1992.

(2) Directive 90/618/EEC (OJ L 330, 29.11.1990), as amended by Directive 92/49/EEC (OJ L 228, 11.8.1992).

(3) OJ L 103, 2.5.1972.

(4) OJ L 8, 11.1.1984.

(5) OJ L 129, 19.5.1990.