WRITTEN QUESTION E-2511/00

by Charles Tannock (PPE-DE) to the Commission

(2 August 2000)

Subject: Car insurance

A report in the 25 June 2000 edition of The Sunday Telegraph claimed that a new nationality requirement had been introduced for cars, whereby a UK citizen buying a car at a significantly lower price in another Member State could no longer rely on a cover note on his existing domestic insurance policy but must take out a temporary insurance policy in the country of purchase. Can the Commission confirm the truth of that report? If so, how is that compatible with the requirements of the single market?

Answer given by Mr Bolkestein on behalf of the Commission

(18 September 2000)

Under Community legislation on motor vehicle insurance, the place of registration of a motor vehicle is the determining factor in deciding in which Member State the risk is located. 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(1) stipulates that the Member State in which the vehicle is registered must ensure that the civil liability in respect of its use is compulsorily insured. Such compulsory insurance must, on the basis of a single premium, guarantee the cover required in the territory of the other Member States according to the legislation in force there or the cover required by the legislation of the Member State in which the vehicle is registered when that cover is higher (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(2)). The cover may be provided by any authorised insurer in the Community, including one that is not established in the Member State in which the vehicle is registered but that carries on the business of insurance by way of the freedom to provide services. Community legislation, and in particular 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 (third non-life insurance Directive)(3), lays down the conditions necessary to ensure that insurers not established in a Member State may, if they so wish, provide compulsory civil-liability motor vehicle insurance by way of the freedom to provide services.

These observations are also valid for vehicles with a temporary registration plate that are intended for importation into a Member State other than that in which they were purchased.

In the case referred to by the Honourable Member, it is the responsibility of the Member State in which the vehicle is registered to ensure that the requirement to take out civil-liability motor vehicle insurance is met. Such insurance must be provided by an insurance contract taken out with an insurance company authorised to do business in that Member State, including an insurer authorised to do business from another Member State by way of the freedom to provide services.

Accordingly, a UK insurer may, if he so wishes, provide cover for vehicles purchased in another Member State by UK citizens and registered there in so far as it is authorised to do business by way of the freedom to provide services.

(1) OJ L 103, 2.5.1972.

(2) OJ L 129, 19.5.1990.

(3) OJ L 228, 11.8.1992.