WRITTEN QUESTION E-1522/03 by Armando Cossutta (GUE/NGL) to the Commission. Unjustified increases in the cost of third-party motor insurance.
Date: 2003-05-06
Institutions: European Parliament, Provisional data
Subjects: Italy, consumer protection, insurance premium, liberalisation of the market, motor vehicle insurance, price freeze, third-party insurance

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with the Euroferro group, formed by the companies Dragados and Bouygues, which had been chosen in
July 2002 to build and operate this section of the track under a concession contract.

This section figures among the 14 projects adopted almost a decade ago by the Essen European Council of
10 December 1994.

Can the Commission say:

(cid:1) whether the Member States involved have received or will receive Community grants for the

completion of this rail project, and

(cid:1) what steps it will take to ensure that the Member States concerned speed up the completion of this

project, which is a priority for the EU?

Answer given by Mrs de Palacio on behalf of the Commission

(19 June 2003)

The Perpignan-Figueras link is part of a trans-European transport network priority project, and is one of
the projects eligible for funding from the trans-European networks budget under the multiannual indicative
programme. Accordingly, EUR 64,5 million is being made available over the period 2001-2006 to
complete the programme of studies and to build the infrastructure. In 2001 the project was awarded a
study grant worth EUR 1 million, shared equally between Spain and France. Previously, over the period
1995-2000, it had already received financial support (cid:1) again from the trans-European networks budget (cid:1)
for technical and legal studies prior to launching the invitation to tender for the concession contract.

The delays in bringing the international link into service are basically due to the difficulties inherent in
setting up the concession for the international section between Perpignan and Figueras. The chosen mode
of financing is based on a public-private partnership. Accordingly, the Commission is bound to support
the French and Spanish authorities’ decision to seek innovative financing formulas, which is something it
encouraged in the communication ‘Developing the trans-European transport network’ adopted some weeks
ago (1). This support takes the form of the maximum Community contribution to the financing of the
international section currently authorised by the trans-European networks financial regulation, i.e. 10 % of
the total cost of the work. To facilitate the financing of trans-boundary sections of major infrastructure
projects, the Commission has proposed that the financial regulation be revised to allow a co-financing rate
of 20 % for work on trans-boundary rail projects which cross natural barriers. This proposal, which
Parliament adopted at first reading in July 2002 (2),
is still waiting for a common position from the
Council.

(1) COM(2003) 132 final.
(2) COM(2003) 38 final.

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WRITTEN QUESTION E-1522/03

by Armando Cossutta (GUE/NGL) to the Commission

(6 May 2003)

Subject: Unjustified increases in the cost of third-party motor insurance

Italy’s competition ombudsman has recently published the results of an investigation into third-party
motor insurance. This has brought to light the fact that, since 1994, the cost of insurance policies in Italy
has doubled and in some cases increased five-fold. The eagerly-awaited liberalisation of the third-party
motor insurance market in Italy (announced in 1994) has come to nothing, as the author of this question
pointed out in an earlier written question dated 14 February 2000. In some parts of Italy, premiums are
nowadays as much as 19 times as expensive as they were nine years ago and since last year they have
increased in cost by 11,6 %, as against an EU average of 4,8 %.

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Does the Commission not think that it should take action vis-à-vis the Italian Government with a

1.
view to promptly reversing such unjustified increases in the cost of insurance cover?

2.
Does the Commission not consider that attempts to create an internal market in motor insurance
have failed, given that most insurance companies refuse to insure drivers resident in a country other than
the one in which they are based, even if that country is an EU Member State?

Answer given by Mr Bolkestein on behalf of the Commission

(9 July 2003)

The Commission is aware of the situation of increases in the cost of third party liability insurance in Italy.
However, the figures available to the Commission do not show as large an increase in motor insurance
premiums as those quoted by the Honourable Member. Since 1995 the average annual inflationadjusted
increase in Italy has been 5,1 % compared to the Union average of 1,7 % (Source European Insurance
Association (cid:1) CEA).

It is true that motor insurance appears to be more expensive in Italy than the Union average but this
reflects the frequency and costs of accidents in Italy compared to the Union average. However, in Italy the
ratio of claims costs plus expenses to the insurers’ income from premiums is similar to the Union average.
In fact claims costs plus expenses exceed premium income in Italy.

There are several reasons for this high cost and frequency of accidents in Italy.

In particular the Commission would like to point out the following:

(cid:1) the high cost of the personal damage: its incidence is higher than e.g. in Germany, France, Spain and
Great Britain. As one example, the incidence of injuries caused by whiplash injury to the neck lesion
(‘colpo di frusta’) represents 66 % of claims involving personal injuries in Italy as compared to 40 % in
Germany, 35 % in the Netherlands, 15 % in Spain, 6 % in France, 5 %in Norway, and 4,8 % in
Denmark;

(cid:1) the high percentage of the claims involving personal injuries: in 1999 the percentage reached 17,3 %

in Italy, as compared to 11 % in Germany, 10 % in France; 8,3 % in Great Britain, and 6 % in Spain;

(cid:1) the high frequency of accidents caused by young people, especially on Saturday nights. This is a well

known social problem in Italy;

(cid:1) the relevant number of frauds: in order to fight this problem a data bank has recently been set up in
the Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse Collettivo (ISVAP). Its aim is to
gather the relevant information on claims;

(cid:1) the number of cars in circulation in relation to the number of inhabitants: the ratio is higher than in
Germany, France and United Kingdom. In particular, in the year 2000 in Italy there were 789 cars per
one thousand inhabitants, in Germany 614, in France 602 and in Great Britain 478;

(cid:1) the number of cars in circulation in relation to the kilometres of the road. There are 137 vehicles in

Italy against 110 in Germany, 40 in France, 76 in Great Britain.

To try to fight
reimbursements in case of personal
insurance sector have been introduced in Italy towards the end of 2002.

these factors, new legislative measures

the
injuries, as well as stricter provisions to limit the frauds in the

to establish guidelines

some of

for

The Commission would like to call the attention of the Honourable Member to a judgement delivered by
the Court of Justice on 25 February 2003, in the case C-59/01 (Commission v. Italian Republic). In this
judgement, the Court has confirmed the principle of tariff freedom in the non-life insurance sector,
including the area of compulsory insurance such as insurance covering third-party liability arising from the
use of motor vehicles. Furthermore, the Court notes that this principle ‘implies the prohibition of any
system of prior or systematic notification or approval of the rates which an undertaking intends to use in
its dealings with policy-holders. The only derogation from that principle allowed by Directive 92/49 (1) and
admitted by the Court would concern prior notification and approval of ’increases in premium rates’ in the

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framework of a ’general price-control system’’. The case was brought to the Court by the Commission
under Article 226 of the EC Treaty and concerned measures adopted by the Italian Government in March
2000 to freeze compulsory motor insurance premiums for an initial period of one year.

Regarding the Honourable Member’s second question, the Commission would like to point out that,
according to the Insurance Directives, all European citizens are allowed to obtain motor insurance cover in
a Member State other than their country of residence.
insurance undertakings may also
provide cross-border services if they follow the procedures set out in these Directives.

In addition,

However, while the Union insurers are allowed to operate on a cross-border basis, they cannot be obliged
to insure risks they are not interested in, in accordance with the principle of contractual freedom. Given
the links of motor insurance with the territory in which the vehicle is normally used and the particularities
of the Italian insurance market as explained above,
it is not strange that many non-Italian insurance
undertakings may prefer to operate in Italy through local branches or subsidiaries (cid:1) rather than on a
cross-border basis from another EU country.

(1) 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), OJ L 228, 11.8.1992.

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WRITTEN QUESTION P-1532/03

by Michael Cashman (PSE) to the Commission

(30 April 2003)

Subject: New technology and privacy and freedoms

Is the Commission aware that there is currently new technology being developed which allegedly has
serious implications for citizens’ privacy, employment, freedom, independence and choice? The technology
involves embedding a chip into every new personal computer, so that hardware, software and applications
will only work if they are on an authorised list which is centrally owned and managed.

Is the Commission concerned that small companies would be prevented from registering their products on
the list as the costs would be too high (around EUR 91 000), and what action is the Commission
considering to limit this situation?

Can the Commission outline what measures are being taken to limit the impact on the European software
development industry?

Answer given by Mr Liikanen on behalf of the Commission

(10 June 2003)

The Commission follows closely the technological and market developments in the Information Society.
The legal framework in the Union for matters of data protection is the Directive 95/46/EC of the
Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the
processing of personal data and on the free movement of such data (1).

Several market players develop technologies that could potentially have a significant impact in the way
that users interact in the information society. Their influence in society is very much dependant upon the
specific features of each application and upon their commercial and business success. Experience with a
number of technologies shows that it is difficult to predict
the direction that the market and the
technological drivers behind it may eventually take.

The development of technologies based on embedded chips is not a new phenomenon. It has been tried in
the past by industry players. Similar efforts have also been made concerning the unique identification of
software and content-related material running on PCs. These technological measures have been more or
less successful.