WRITTEN QUESTION E-2407/03 by Bart Staes (Verts/ALE) to the Commission. Motor-vehicle insurance.
Date: 2003-07-21
Institutions: European Parliament, Provisional data
Subjects: age discrimination, consumer protection, discriminatory price, insurance company, insurance contract, insurance law, insurance premium, motor vehicle insurance, third-party insurance

27.3.2004

EN

Official Journal of the European Union

C 78 E/405

Although third-party liability insurance is compulsory, the number of uninsured drivers is increasing daily.
What measures is the Commission proposing which it or the Member States must take in order to
(a) significantly reduce that number and (b) simultaneously ensure that every driver may have access to
affordable third-party liability insurance?

(1) Oral answer given on 3 September 2002.

(2004/C 78 E/0427)

WRITTEN QUESTION E-2407/03

by Bart Staes (Verts/ALE) to the Commission

(21 July 2003)

Subject: Motor-vehicle insurance

On 19 June 2003, the Belgian Insurance Ombudsman presented her annual report. The report states that
there were so many wholesale cancellations, which, in only very few cases, were obviously justified, that
the question arises whether an insurance company, which initially entices clients only to abandon them
subsequently without giving the slightest reason for so doing, is not abusing the law. After all, insurers
may cancel a policy every twelve months without further ado, provided that it gives due notice to the
policy-holder.

The information set out in the Ombudsman’s report shows that insurers are allowed to refuse to give to
clients who are involved in a liability claim any cover other than the obligatory third-party liability
insurance, even if the person involved was not at fault or if no third party was involved.

Does the Commission share my view that it should not be possible for insurers without further ado to
refuse cover for certain risks to drivers involved in an accident where they were not themselves at fault or
where no third party was involved, if only on the grounds that it is fairly pointless to insure oneself against
something if large numbers of insurers refuse to pay out claims for damages made in good faith? If not,
why not? If so, what measures will it take on behalf of the consumers involved?

Is it indeed an abuse of the law for insurers to entice clients and subsequently to abandon them without
reason? If, so what measures will the Commission take? If not, what arguments can the Commission put
forward to allay the suspicions of the Belgian Insurance Ombudsman?

Joint answer
to Written Questions E-2405/03, E-2406/03 and E-2407/03
given by Mr Bolkestein on behalf of the Commission

(4 September 2003)

The Commission is following with some concern the situation in a number of Member States where
increases in the cost of compulsory insurance may have the perverse effect of impeding or actually
preventing freedom of choice for individuals (and, in particular, young people and the elderly) between the
different means of transport available to them (private vehicle or public transport). It would refer the
to Written Questions Nos 592/02 (1) and 1522/03 (2) by
Honourable Member
Marianne Thyssen and Armando Cossutta respectively.

to its answers

However, the Commission remains attached to the principle of freedom to set premiums advocated by the
Third Insurance Directives, particularly in the case of civil liability motor-vehicle insurance despite the fact
that the compulsory nature of such insurance has been recently confirmed by the Court of Justice (see in
particular the ruling of 25 February 2003 (3)). This is because competitive pressures benefit consumers.

The Honourable Member mentions the spirit of Article 21 of the Charter of Fundamental Rights of the
European Union and of Article II-21 of the Draft Treaty establishing a European Constitution. The
Commission would point out that differential treatment does not necessarily constitute discrimination
based on the age of the policyholder where such treatment can be justified by objective factors reflecting
objective underlying circumstances when it comes to determining the level of the policyholder’s premiums.
For instance, it must be borne in mind that companies set their premiums ‘inter alia’ on the basis of
average claims frequency. Depending on their assessment of the risk, they are free to decide to adjust their

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Official Journal of the European Union

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27.3.2004

offer or even to leave certain domestic niche markets to competitors. In any event, the Commission has a
duty to point out that segmentation is in no way a result of European regulation but is instead a technique
for setting premiums that more closely reflect the situation on each local market: different premiums are
applied to individuals in respect of whom different costs are incurred. To that extent, segmentation would
seem to be consistent with Community law, provided that it corresponds to different customer categories
whose risks can be assessed by appropriate and objective statistical analyses.

In his Written Question E-2406/03, the Honourable Member raises the problem of a policyholder’s history
of making claims. The Commission would remind him that the abandonment of the uniform compulsory
no-claims bonus system in Belgium is the direct result of the action that it took back in 1996 and that led
ultimately in 2002 (4) to the introduction of measures separating the scale from the premium. Companies
will thus have greater freedom to treat policyholders differently on the basis of their actual claims history
and to offer their customers more competitive premiums.

The Honourable Member also refers in that question to the measures inserted into Belgian legislation by
Article 2 of the Law of 2 August 2002 (‘Loi Monfils’ (5)). This provision allows any individual to contact
the Rating Office if at least three insurance companies contacted by him have refused to provide cover.
It should be pointed out that the proposal for a premium exceeding a threshold determined by multiplying
by five the lowest premium of the insurance company’s scale for a motor vehicle identical to that for
which cover is being sought is regarded as a refusal under that provision. It is clear that, in accordance
with the European regulatory framework, the national authorities have sole responsibility for introducing
the appropriate mechanisms to ensure that policyholders comply with the requirement
to take out
compulsory civil liability insurance. Accordingly, the Commission could not comment on measures such as
these or such as that mentioned in Written Question No E-2407/03 that fall within the remit of the
Belgian institutions responsible for the monitoring and commercial policy of companies. It does though
warmly welcome the measure to combat the failure to take out insurance that is contained in those
provisions and is, in its view, perfectly compatible with the objective pursued by the civil liability motor-
vehicle insurance directives.

For its part, the Commission has taken the initiative of proposing as part of the modernisation of the civil
liability motor-vehicle insurance directives a number of measures aimed at making it easier for individuals
wishing to change their insurance company (requirement on the insurer to issue a claims history
certificate) so as to benefit from the best policy conditions available at any time (6). In this connection, it
would, of course, welcome any transparency measure that would reduce the information imbalance
existing between the insurer and the policyholder.

The Commission is also convinced that the way to reduce the cost of civil liability motor-vehicle insurance
inevitably involves improvements in road safety: in 2002 road accidents caused the death of 41 761 people
(of whom 1 470 in Belgium) and injured more than 1,7 million people in the European Union. Between
1991 and 2001 16 918 people were killed on Belgian roads (7). To put a stop to this, the European Union
is conducting a very ambitious road safety campaign that will also bring financial benefits for policyholders
since any decline in the accident rate is bound to be reflected in the level of the premium.

Lastly, as for the Belgian Government’s plan for the period of validity of insurance policies covering the
civil motor-vehicle liability of young drivers mentioned in Written Question E-2405/03, it is not for the
Commission to comment on hypothetical draft national rules.

(1) OJ C 301 E, 5.12.2002.
(2) OJ C 33 E, 6.2.2004, p. 128.
(3) Case C-59/01 Commission v Italian Republic, and in particular paragraph 29.
(4) With the adoption of the Royal Decree of 16 January 2002 amending the Royal Decree of 22 February 1991 laying
down general rules for the control of insurance companies and the Royal Decree of 14 December 1992 on the
standard compulsory liability insurance contract for motor vehicles, published in the Belgian Gazette of 14 February
2002.

(5) Published in the Belgian Gazette of 30 August 2002.
(6) COM(2002) 244 final.
(7) According to CARE, the Community Road Accident Database, http://europa.eu.int/comm/transport/home/care/

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