Common Position (EC) No 27/2004 of 26 April 2004 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a directive of the European Parliament and of the Council amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive 2000/26/EC of the European Parliament and of the Council relating to insurance against civil liability in respect of the use of motor vehicles   (Text with EEA relevance)
Date: 2004-04-26
Institutions: Council of the European Union
Subjects: insurance company, insurance law, motor vehicle insurance, third-party insurance

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COMMON POSITION (EC) No 27/2004

adopted by the Council on 26 April 2004

with a view to adopting Directive 2004/…/EC of the European Parliament and of the Council of …
amending Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and 90/232/EEC and Directive
2000/26/EC of the European Parliament and of the Council relating to insurance against civil liabi-
lity in respect of the use of motor vehicles

(Text with EEA relevance)

(2004/C 101E/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European Com-
munity, and in particular the first and third sentences of Article
47(2), Article 55 and Article 95(1) thereof,

Having regard to the proposal from the Commission (1),

Having regard to the Opinion of the European Economic and
Social Committee (2),

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1)

(2)

is of special

Insurance against civil liability in respect of the use of
motor vehicles (motor insurance)
impor-
tance for European citizens, whether they are policy-
holders or victims of an accident.
It is also a major
concern for insurance undertakings as it constitutes an
important part of non-life insurance business in the
Community. Motor insurance also has an impact on the
free movement of persons and vehicles. It should there-
fore be a key objective of Community action in the field
of
financial services to reinforce and consolidate the
single insurance market in motor insurance.

Very significant advances in this direction have already
been achieved by Council Directive 72/166/EEC of 24
April 1972 on the approximation of
the laws of
Member States relating to insurance against civil liability
in respect of the use of motor vehicles, and to the enfor-
cement of the obligation to insure against such liabi-
lity (4), by 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 (5), by Third

(1) OJ C 227 E, 24.9.2002, p. 387.
(2) OJ C 95, 23.4.2003, p. 45.
(3) Opinion of the European Parliament of 22 October 2003 (not yet
published in the Official Journal), Council Common Position of 26
April 2004 and Position of the European Parliament of … (not yet
published in the Official Journal).

(4) OJ L 103, 2.5.1972, p. 1. Directive as last amended by Directive

84/5/EEC (OJ L 8, 11.1.1984, p. 17).

(5) OJ L 8, 11.1.1984, p. 17. Directive as last amended by Directive

90/232/EEC (OJ L 129, 19.5.1990, p. 33).

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 (6) and by Directive 2000/26/EC of the
European Parliament and of the Council of 16 May
2000 on the approximation of the laws of the Member
States relating to insurance against civil
liability in
respect of the use of motor vehicles (Fourth motor insur-
ance Directive) (7).

(3)

(4)

(5)

The Community system of motor insurance needs to be
updated and improved. This need has been confirmed by
the consultation conducted with the industry, consumers
and victims' associations.

In order to exclude any possible misinterpretation of the
provisions of Directive 72/166/EEC and to make it
easier to obtain insurance cover for vehicles bearing
temporary plates, the definition of the territory in which
the vehicle is normally based should refer to the territory
of the State of which the vehicle bears a registration
plate, irrespective of whether such a plate is permanent
or temporary.

In accordance with Directive 72/166/EEC, vehicles
bearing false or
illegal plates are considered to be
normally based in the territory of the Member State that
issued the original plates. This rule often means that
national insurers' bureaux are obliged to deal with the
economic consequences of accidents which do not have
any connection with the Member State where they are
established. Without altering the general criterion of the
registration plate to determine the territory in which the
vehicle is normally based, a special rule should be
provided in the case of an accident caused by a vehicle
without a registration plate or bearing a registration
plate which does not correspond or no longer corre-
sponds to the vehicle.
In this case and for the sole
purpose of settling the claim, the territory in which the
vehicle is normally based should be the territory in
which the accident took place.

(6) OJ L 129, 19.5.1990, p. 33.
(7) OJ L 181, 20.7.2000, p. 65.

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(6)

(7)

(8)

In order to facilitate the interpretation and application of
the term ‘random checks’ in Directive 72/166/EEC, the
relevant provision should be clarified. The prohibition of
systematic checks on motor insurance should apply to
vehicles normally based in the territory of another
Member State as well as to vehicles normally based in
the territory of a third country but entering from the
territory of another Member State. Only non-systematic
checks which are not discriminatory and are carried out
as part of a control not aimed exclusively at insurance
verification may be permitted.

Article 4(a) of Directive 72/166/EEC permits a Member
State to act in derogation from the general obligation to
take out compulsory insurance in respect of vehicles
belonging to certain natural or legal persons public or
private. In case of accidents caused by these vehicles, the
Member State so derogating must designate an authority
or body to compensate damage to victims of accidents
caused in another Member State. In order to ensure that
not only the victims of accidents caused by these vehi-
cles abroad are duly compensated but also the victims of
accidents occurring in the same Member State in which
the vehicle is normally based, whether they are or not
the aforementioned Article
resident
the Member States
should be amended. Furthermore,
from
should ensure that
compulsory insurance and the authorities or bodies
responsible for compensation of victims of accidents
caused by these vehicles
is communicated to the
Commission for publication.

the list of persons exempt

territory,

in its

Article 4(b) of Directive 72/166/EEC permits a Member
State to act in derogation from the general obligation to
take out compulsory insurance in respect of certain
types of vehicles or certain vehicles having a special
plate. In that case, the other Member States are allowed
to require, at the entry into their territory, a valid green
card or a frontier insurance contract, in order to ensure
compensation to victims of any accident which may be
caused by these vehicles in their territories. However,
since the elimination of border controls within the Com-
munity does not make it possible to ensure that the
vehicles crossing the frontier are covered by insurance,
compensation for victims of accidents caused abroad can
no longer be guaranteed. Furthermore, it should also be
ensured that due compensation is awarded not only to
the victims of accidents caused by these vehicles abroad,
but also in the same Member State in which the vehicle
is normally based. For this purpose, Member States
should treat the victims of accidents caused by these
vehicles in the same way as victims of accidents caused
by non-insured vehicles.
Indeed, as provided for in
Directive 84/5/EEC, compensation to victims of acci-
dents caused by uninsured vehicles should be paid by
the compensation body of the Member State in which
the accident
to
victims of accidents caused by vehicles subject to the

In the case of payment

took place.

derogation, the compensation body should have a claim
against the body of the Member State in which the
vehicle is normally based. After a period of five years
from the date of entry into force of this Directive, the
Commission should,
the
experience on the implementation and application of
this derogation, submit proposals aiming at its replace-
ment or repeal. The corresponding provision in Directive
2000/26/EC should also be deleted.

if appropriate,

in view of

(9)

In order to clarify the scope of application of the motor
insurance directives in accordance with Article 299 of
the Treaty, the reference to the non-European territory
of the Member States in Articles 6 and 7(1) of Directive
72/166/EEC should be deleted.

(10) Member States' obligations to guarantee insurance cover
at least in respect of certain minimum amounts consti-
tute an important element in ensuring the protection of
the victims. The minimum amounts provided for by
Directive 84/5/EEC should not only be updated to take
account of inflation, but should be increased in real
terms to improve the protection of victims. With a view
these minimum
to facilitating the
amounts, a transitional period of five years from the
implementation date of this Directive should be estab-
lished. Member States should increase the amounts to at
least a half of the levels within 30 months of the imple-
mentation date.

introduction of

(11)

In order to ensure that the minimum amount of cover is
not eroded over time, a periodic review clause should be
introduced using as a benchmark the European Index of
Consumer Prices
(EICP) published by Eurostat, as
provided for in Council Regulation (EC) No 2494/95 of
23 October 1995 concerning harmonised indices of
consumer prices (1). The procedural rules governing such
a review need to be established.

to limit or

(12) Directive 84/5/EEC which allows Member States, in the
interest of preventing fraud,
exclude
payments by the compensation body in the case of
damage to property by an unidentified vehicle, may
impede legitimate compensation of victims in some
cases. The option to limit or exclude compensation on
the basis that the vehicle is not identified should not
apply where the body has paid compensation for signifi-
cant personal injuries to any victim of the same accident
in which damage to property was caused. Member States
may provide for an excess up to the limit set out in the
said Directive for which the victim of the damage to
property may be responsible. The conditions for the
personal injuries to be considered significant should be
determined by the national legislation or administrative
provisions of the Member State where the accident takes
place. In establishing these conditions, the Member State
may take into account, inter alia, whether the injury has
required hospital care.

(1) OJ L 257, 27.10.1995, p. 1. Regulation as amended by Regulation
(EC) No 1882/2003 of the European Parliament and of the Council
(OJ L 284, 31.10.2003, p. 1).

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(13) At present, an option contained in Directive 84/5/EEC
allows Member States to authorise, up to a specified
ceiling, excesses for which the victim would be respon-
sible in the event of damage to property caused by unin-
sured vehicles. That option unjustly reduces the protec-
tion of victims and creates discrimination with respect
to victims of other accidents.
It should therefore no
longer be permitted.

sory motor insurance should cover, on the basis of a
single premium, the entire territory of the Community.
It should therefore be specified that the insurance cover
the
should remain valid during the whole term of
contract, irrespective of whether the vehicle remains in
another Member State for a particular period, without
prejudice to the obligations under Member States'
national
legislation with respect to the registration of
vehicles.

(14)

(15)

Second Council Directive 88/357/EEC of 22 June 1988
on the coordination of laws, regulations and administra-
tive provisions relating to direct insurance other than life
assurance and laying down provisions to facilitate the
freedom to provide services (1),
effective exercise of
should be amended in order to permit branches of insur-
representatives with
to become
ance undertakings
respect to motor insurance activities, as already happens
with respect
to insurance services other than motor
insurance.

insurance

inclusion within the

The
cover of any
passenger in the vehicle is a major achievement of the
existing legislation. This objective would be placed in
jeopardy if national legislation or any contractual clause
contained in an insurance contract excluded passengers
from insurance cover because they knew or should have
known that the driver of the vehicle was under the influ-
ence of alcohol or of any other intoxicating agent at the
time of the accident. The passenger is not usually in a
position to assess properly the intoxication level of the
driver. The objective of discouraging persons
from
driving whilst under the influence of intoxicating agents
is not achieved by reducing the insurance cover for
passengers who are victims of motor vehicle accidents.
Cover of these passengers under the vehicle's compul-
sory motor insurance does not prejudge any liability
they might have incurred pursuant to the applicable
national
the level of any award of
damages in a specific accident.

legislation, nor

(18)

(19)

Steps should be taken to make it easier to obtain insur-
ance cover for vehicles imported from one Member
State into another, even though the vehicle is not yet
registered in the Member State of destination. A
temporary derogation from the general rule determining
the Member State where the risk is situated should be
introduced. For a period of 30 days from the date when
the vehicle is delivered, made available or dispatched to
the purchaser, the Member State of destination should
be considered to be the Member State where the risk is
situated.

The person wishing to take out a new motor insurance
contract with another insurer should be able to justify
his accident and claims record under the old contract.
The policyholder should have the right to request at any
time a statement concerning the claims, or the absence
of claims, involving the vehicle or vehicles covered by
the insurance contract at least during the preceding five
relationship. The insurance
years of
undertaking, or any body which may have been
appointed by a Member State to provide compulsory
insurance or to supply such statements, should provide
this statement to the policyholder within 15 days of the
request.

the contractual

(16)

Personal
injuries and damage to property suffered by
pedestrians, cyclists and other non-motorised users of
the road, who are usually the weakest party in an acci-
dent, should be covered by the compulsory insurance of
the vehicle involved in the accident where they are
entitled to compensation according to national civil law.
This provision does not prejudge the civil liability or the
level of awards for damages in a specific accident, under
national legislation.

(17)

Some insurance undertakings insert into insurance poli-
cies clauses to the effect
the contract will be
cancelled if
the vehicle remains outside the Member
State of registration for longer than a specified period.
This practice is in conflict with the principle set out in
Directive 90/232/EEC, according to which the compul-

that

(1) OJ L 172, 4.7.1988, p. 1. Directive as last amended by Directive

2000/26/EC.

(20)

In order to ensure due protection for the victims of
motor vehicle accidents, Member States should not
permit
to rely on excesses
against an injured party.

insurance undertakings

(21)

The right to invoke the insurance contract and to claim
against the insurance undertaking directly is of great
importance for the protection of
the victim of any
motor-vehicle accident. Directive 2000/26/EC already
provides victims of accidents occurring in a Member
State other than the Member State of residence of the
injured party, which are caused by the use of vehicles
insured and normally based in a Member State, with a
right of direct action against the insurance undertaking
covering the person responsible against civil liability. In
order to facilitate an efficient and speedy settlement of
claims and to avoid as far as possible costly legal
proceedings, this right should be extended to victims of
any motor vehicle accident.

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(22)

(23)

To enhance the protection of any victim of a motor
vehicle accident, the ‘reasoned offer’ procedure provided
for in Directive 2000/26/EC should be extended to any
kind of motor vehicle accident. This same procedure
should also apply mutatis mutandis where the accident
is settled by the system of national
insurers' bureaux
provided for in Directive 72/166/EEC.

In order to make it easier for the injured party to seek
compensation, the information centres set up in accord-
ance with Directive 2000/26/EC should not be confined
to providing information concerning the accidents
covered by that Directive, but should be able to provide
the same kind of information for any motor vehicle acci-
dent.

(24) As Directive 2000/26/EC was adopted before the adop-
tion of Council Regulation (EC) No 44/2001 of
22 December 2000 on jurisdiction and the recognition
and enforcement of judgments in civil and commercial
matters (1) which replaced the Brussels Convention of 27
September 1968 on the same matter for a number of
Member States, the reference to such Convention in that
Directive should be adapted as appropriate.

(25)

Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC
and 90/232/EEC and Directive 2000/26/EC of the Euro-
pean Parliament and of the Council should therefore be
amended accordingly,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

the first indent of Article 2(2) of this Directive or in
Article 1(4) of 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 (*);

(*) OJ L 8, 11.1.1984, p. 17.’;

2.

in Article 2, paragraph 1 shall be replaced by the following:

‘1. Member States shall refrain from making checks on
insurance against civil
liability in respect of vehicles
normally based in the territory of another Member State
and in respect of vehicles normally based in the territory of
a third country entering their territory from the territory of
another Member State. However, they may carry out non-
systematic checks on insurance provided that they are not
discriminatory and are carried out as part of a control
which is not aimed exclusively at insurance verification.’;

3. Article 4 shall be amended as follows:

(a) in point (a), second subparagraph:

(i) the first sentence shall be replaced by the following:

‘A Member State so derogating shall take the
appropriate measures to ensure that compensa-
tion is paid in respect of any loss or injury
caused in its territory and in the territory of
other Member States by vehicles belonging to
such persons.’;

Amendments to Directive 72/166/EEC

(ii) the last sentence shall be replaced by the following:

Directive 72/166/EEC shall be amended as follows:

1. In Article 1, point 4 shall be amended as follows:

(a) the first indent shall be replaced by the following:

‘It shall communicate to the Commission the list
of persons exempt from compulsory insurance
and the authorities or bodies responsible for
compensation. The Commission shall publish
the list.’;

‘— the territory of the State of which the vehicle bears
a registration plate, irrespective of whether the plate
is permanent or temporary or;’;

(b) in point (b), the second subparagraph shall be replaced

by the following:

(b) the following indent shall be added:

‘— in cases where vehicles do not bear any registration
plate or bear a registration plate which does not
correspond or no longer corresponds to the vehicle
and have been involved in an accident, the territory
of the State in which the accident took place, for
the purpose of settling the claim as provided for in

(1) OJ L 12, 16.1.2001, p. 1. Regulation as last amended by 2003 Act

of Accession.

‘In that case Member States shall ensure that vehicles
as mentioned in the first subparagraph of this point
are treated in the same way as vehicles for which
the insurance obligation provided for in Article 3(1)
has not been satisfied. The compensation body of
the Member State in which the accident has taken
place shall then have a claim against the guarantee
fund provided for
in Article 1(4) of Directive
84/5/EEC in the Member State where the vehicle is
normally based.

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After a period of five years from the date of entry
into force of Directive 2004/…/EC of the European
Parliament and of the Council amending Council
Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and
90/232/EEC and Directive 2000/26/EC of the Euro-
pean Parliament and of the Council relating to insur-
ance against civil
liability in respect of the use of
motor vehicles (*), Member States shall report to the
Commission on the implementation and practical
application of
this point. The Commission, after
having examined these reports, shall, if appropriate,
submit proposals on the replacement or repeal of
this derogation.

(*) OJ L …, p. …’;

4.

in Articles 6 and 7(1) the words ‘or in the non-European
territory of a Member State’ shall be deleted.

Article 2

Amendments to Directive 84/5/EEC

Article 1 of Directive 84/5/EEC shall be replaced by the
following:

‘Article 1

1.
The insurance referred to in Article 3(1) of Directive
72/166/EEC shall cover compulsorily both damage to
property and personal injuries.

2. Without prejudice to any higher guarantees which
Member States may lay down, each Member State shall
require insurance to be compulsory at least in respect of
the following amounts:

(a) in the case of personal

injury, EUR 1 000 000 per
victim; Member States may, in place of such amount,
provide for a minimum amount of EUR 5 000 000 per
claim, whatever the number of victims;

(b) in the case of damage to property, EUR 1 000 000 per

claim, whatever the number of victims.

Member States shall have a transitional period of five years
from the implementation date of Directive 2004/…/EC of
the European Parliament and of
the Council amending
Council Directives 72/166/EEC, 84/5/EEC, 88/357/EEC and
90/232/EEC and Directive 2000/26/EC of the European
Parliament and of the Council relating to insurance against
civil
liability in respect of the use of motor vehicles (*),
within which to increase guarantees up to the levels
requested by this paragraph.

as set out
in Council Regulation (EC) No 2494/95 of
23 October 1995 concerning harmonised indices of
consumer prices (**). The first review shall take place five
years from the entry into force of Directive 2004/…/EC.

The amounts shall be adjusted automatically. Such amounts
shall be increased by the percentage change indicated by
the EICP for the relevant period, that is to say, the five
years immediately preceding the review, and rounded up to
a multiple of EUR 10 000.

The Commission shall communicate the adjusted amounts
to the European Parliament and the Council and shall
ensure their publication in the Official Journal of the Euro-
pean Union.

4.
Each Member State shall set up or authorise a body
with the task of providing compensation, at least up to the
limits of the insurance obligation for damage to property
or personal injuries caused by an unidentified vehicle or a
vehicle for which the insurance obligation provided for in
paragraph 1 has not been satisfied.

The first subparagraph shall be without prejudice to the
right of the Member States to regard compensation by the
body as subsidiary or non-subsidiary and the right to make
provision for the settlement of claims between the body
and the person or persons responsible for the accident and
other insurers or social security bodies required to compen-
sate the victim in respect of the same accident. However,
Member States may not allow the body to make the
payment of the compensation conditional on the victim
establishing in any way that the person liable is unable or
refuses to pay.

5.
The victim may in any case apply directly to the body
which, on the basis of information provided at its request
by the victim, shall be obliged to give him a reasoned reply
regarding the payment of any compensation.

Member States may, however, exclude the payment of
compensation by that body in respect of persons who
voluntarily entered the vehicle which caused the damage or
injury when the body can prove that they knew it was
uninsured.

6. Member States may limit or exclude the payment of
compensation by the body in the event of damage to prop-
erty by an unidentified vehicle.

Within 30 months of the implementation date of Direc-
tive 2004/…/EC Member States shall increase guarantees to
at least a half of the levels provided for in this paragraph.

3.
The amounts referred to in paragraph 2 shall be
reviewed every five years in order to take account of
changes in the European Index of Consumer Prices (EICP),

However, where the body has paid compensation for signif-
icant personal injuries to any victim of the same accident
in which damage to property was caused by an unidentified
vehicle, Member States may not exclude the payment of
compensation for damage to property on the basis that the
vehicle is not identified. Nevertheless, Member States may
provide for an excess of not more than EUR 500 for which
the victim of such damage to property may be responsible.

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The conditions for the personal injuries to be considered
significant shall be determined in accordance with the legis-
lation or administrative provisions of the Member State in
In this regard, Member
which the accident takes place.
States may take into account, inter alia, whether the injury
has required hospital care.

Each Member State shall apply its laws, regulations
7.
and administrative provisions to the payment of compensa-
tion by the body, without prejudice to any other practice
which is more favourable to the victim.

(*) OJ L …, p. …
(**) OJ L 257, 27.10.1995, p. 1. Regulation as amended by
Regulation (EC) No 1882/2003 of the European Parlia-
ment and of the Council (OJ L 284, 31.10.2003, p. 1).’.

Article 3

Amendments to Directive 88/357/EEC

The second sentence in the fourth subparagraph of Article
12a(4) of Directive 88/357/EEC shall be deleted.

‘— cover, on the basis of a single premium and during the
whole term of the contract, the entire territory of the
Community, including for any period when the vehicle
remains in other Member States during the term of the
contract; and’;

4. the following Articles shall be inserted:

‘Article 4a

1.
By way of derogation from the second indent of
Article 2(d) of Directive 88/357/EEC (*), where a vehicle is
imported from one Member
the
Member State where the risk is situated shall be considered
to be the Member State of destination, immediately upon
the date when the vehicle has been delivered, made available
or dispatched to the purchaser for a maximum period of 30
days, even though the vehicle has not formally been regis-
tered in the Member State of destination.

to another,

State

2.
In the event that the vehicle is involved in an accident
during the period mentioned in paragraph 1 of this Article
while being uninsured, the body referred to in Article 1(4)
of Directive 84/5/EEC in the Member State of destination
shall be liable for the compensation provided for in Article 1
of the said Directive.

Article 4

Amendments to Directive 90/232/EEC

Article 4b

Directive 90/232/EEC shall be amended as follows:

1. In Article 1,

the following paragraph shall be inserted

between the first and second paragraphs:

‘Member States shall take the necessary measures to ensure
that any statutory provision or any contractual clause
contained in an insurance policy which excludes a passenger
from such cover on the basis that he knew or should have
known that the driver of the vehicle was under the influence
of alcohol or of any other intoxicating agent at the time of
an accident, shall be deemed to be void in respect of the
claims of such passenger.’;

Member States shall ensure that the policyholder shall have
the right to request at any time a statement relating to the
third party liability claims involving the vehicle or vehicles
least during the
covered by the insurance contract at
preceding five years of the contractual relationship, or to
the absence of such claims. The insurance undertaking, or a
body which may have been appointed by a Member State to
provide compulsory insurance or to supply such statements,
shall provide this statement to the policyholder within 15
days of the request.

2. the following Article shall be inserted:

Article 4c

‘Article 1a

The insurance referred to in Article 3(1) of Directive
72/166/EEC shall cover personal
injuries and damage to
property suffered by pedestrians, cyclists and other non-
motorised users of the roads who, as a consequence of an
accident in which a motor vehicle is involved, are entitled
to compensation in accordance with national civil law. This
Article shall be without prejudice either to civil liability or
to the amount of damages.’

3.

in Article 2,
following:

the first

indent shall be replaced by the

Insurance undertakings shall not rely on excesses against the
injured party to an accident as far as the insurance referred
to in Article 3(1) of Directive 72/166/EEC is concerned.

Article 4d

Member States shall ensure that injured parties to accidents
caused by a vehicle covered by insurance as referred to in
Article 3(1) of Directive 72/166/EEC enjoy a direct right of
action against
the insurance undertaking covering the
responsible person against civil liability.

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Article 4e

Member States shall establish the procedure provided for in
Article 4(6) of Directive 2000/26/EC (**) for the settlement
of claims arising from any accident caused by a vehicle
covered by insurance as referred to in Article 3(1) of Direc-
tive 72/166/EEC.

In the case of accidents which may be settled by the system
of national insurers' bureaux provided for in Article 2(2) of
Directive 72/166/EEC, Member States shall establish the
same procedure as in Article 4(6) of Directive 2000/26/EC.
For the purpose of applying this procedure any reference to
insurance undertaking shall be understood as a reference to
national insurers' bureaux as defined in Article 1, point 3 of
Directive 72/166/EEC.

(*) Second Council Directive 88/357/EEC of 22 June 1988
on the coordination of laws, regulations and administra-
tive provisions relating to direct insurance other than life
assurance and laying down provisions to facilitate the
effective exercise of freedom to provide services (OJ L
172, 4.7.1988, p. 1). Directive as last amended by Direc-
tive 2000/26/EC (OJ L 181, 20.7.2000, p. 65).

(**) Directive 2000/26/EC of the European Parliament and
of the Council of 16 May 2000 on the approximation
of the laws of the Member States relating to insurance
against civil liability in respect of the use of motor vehi-
cles (OJ L 181, 20.7.2000, p. 65).’;

5.

in Article 5, paragraph 1 shall be replaced by the following:

‘1. Member States shall ensure that, without prejudice to
their obligations under Directive 2000/26/EC, the informa-
tion centres established or approved in accordance with
Article 5 of that Directive, provide the information specified
in that Article to any party involved in any traffic accident
caused by a vehicle covered by insurance as referred to in
Article 3(1) of Directive 72/166/EEC.’.

Article 5

Amendments to Directive 2000/26/EC

Directive 2000/26/EC shall be amended as follows:

‘8.
The appointment of a claims representative shall not
in itself constitute the opening of a branch within the
meaning of Article 1(b) of 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 the claims representative shall not
be considered an establishment within the meaning of
Article 2(c) of Second Council Directive 88/357/EEC or

— an establishment within the meaning of the Brussels
Convention of 27 September 1968 on Jurisdiction and
the Enforcement of Judgments in Civil and Commercial
Matters — as far as Denmark is concerned,

— an establishment within the meaning of Council Regu-
lation (EC) No 44/2001 of 22 December 2000 on juris-
diction and the recognition and enforcement of judg-
ments in civil and commercial matters (**) — as far as
the other Member States are concerned.

(*) OJ L 228, 11.8.1992, p. 1. Directive as last amended by
Directive 2002/87/EC of the European Parliament and of
the Council (OJ L 35, 11.2.2003, p. 1).

(**) OJ L 12, 16.1.2001, p. 1. Regulation as last amended

by 2003 Act of Accession.’;

2.

in Article 5(1)(a), point 2(ii) shall be deleted.

Article 6

Implementation

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive by … (*) at the latest. They shall inform the Commis-
sion thereof forthwith.

When Member States adopt those measures, they shall contain
a reference to this Directive or shall be accompanied by such
reference on the occasion of their official publication.

The methods of making such reference shall be laid down by
Member States.

2. Member States may, in accordance with the Treaty, main-
tain or bring into force provisions which are more favourable
to the injured party than the provisions necessary to comply
with this Directive.

1. In Article 4, paragraph 8 shall be replaced by the following:

(*) 24 months after the date of entry into force of this Directive.

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3. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field covered by this Directive.

Article 8

Addressees

This Directive is addressed to the Member States.

Article 7

Entry into force

Done at … ,

This Directive shall enter into force on the day of its publica-
tion in the Official Journal of the European Union.

For the European Parliament

The President

For the Council

The President

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STATEMENT OF THE COUNCIL'S REASONS

I.

INTRODUCTION

On 7 June 2002, the Commission presented its proposal for a Directive of the European Parliament
and of the Council amending Council Directives 72/166/EEC, 84/5 EEC, 88/357/EEC, 90/232/EEC and
Directive 2000/26/EC on insurance against civil liability in respect of the use of motor vehicles (1). The
proposal was based on Articles 47(2), 55 and 95(1) of the Treaty.

The European Parliament delivered its opinion at first reading on 22 October 2003 (2).

The Economic and Social Committee has given its opinion on 26 February 2003 (3).

On 27 November 2003, the Council reached a political agreement with a view to adopting a common
position at a later stage in accordance with Article 251(2) of the Treaty.

On 26 April 2004 the Council adopted its Common Position on the proposal as set out
doc. 16182/03.

in

II. OBJECTIVE

The objective of the above-mentioned proposal is to update existing provisions in the field of motor
vehicle insurance in order to enhance the protection of possible victims, to take into account the
increased cross-border-traffic with practically only exceptional border controls and to create a more
efficient market in motor insurance products. To this end, some apparent gaps in existing legislation
had to be filled, too.

Among the most important elements are the improvements of insurance cover in the case of a long-
term stay outside the country of registration, the increase in minimum amounts of insurance cover for
personal injury and damage to property throughout the Union, and the elimination of any existing
exclusion from the insurance cover on the basis that the driver was under influence of alcohol or in
the case of an accident with an unidentified vehicle. In the case of victims caused by non-identified
vehicles, the risk of fraud and the objective of not excluding payments to victims too easily had to be
balanced out. Another question was those of different legal concepts in Member States, for example
with regard to the possibility of excesses to be borne by the insured himself in certain cases. Moreover,
provisions to facilitate short term insurance cover in the case of purchase and registration of a car in
different jurisdictions as well as harmonized provisions with regard to the settlement of claims along
the lines of the Fourth Motor Insurance Directive should help to further clarify the European legal
environment.

III. ANALYSIS OF THE COMMON POSITION AS SET OUT IN DOC. 16182/03 (4)

1. GENERAL

The compromise text on which a political agreement was reached in Council maintains the main
objectives of the Commission's proposal. At the same time it takes on board some of the amend-
ments of the European Parliament. The Council modified the Commission's proposal following
the spirit of the European Parliament's amendments especially by not deleting the existing deroga-
tion for agricultural vehicles and by replacing the proposed provision on the insurance cover for
pedestrians and cyclists by a provision which more clearly takes into account existing national
law (Article 4(2)). As an innovation, the Council introduced a new provision in Article 1(4) to
avoid any misinterpretation of the territorial scope of the Motor Insurance Directives. Similarly,
the Council simplified the proposed provision on the application to any kind of motor accidents
of the settlement procedures as given in the Fourth Motor Insurance Directive and extended them
to the ‘Green Card’ settlement system (Article 4(4) inserting Article 4e into Directive 90/232/EEC).

(1) OJ C 227 E, 24.9.2002, p. 387.
(2) Not yet published in the Official Journal.
(3) OJ C 95, 23.4.2003, p. 45.
(4) Note: The numbering of articles refers to the result of the first reading of Parliament (doc. 13585/03) or, where it is

specially indicated (‘now:…’) to the document reflecting the Common Position in Council (doc. 16182/03).

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These modifications were justified mainly for technical reasons. However, some provisions of the
Commission proposal were modified to avoid some possible conflicts with the law already applic-
able in Member States.

2. EP AMENDMENTS

At its first reading the European Parliament adopted 26 amendments to the text (1). During the
Working Party meetings, these EP amendments were scrutinized and a number of them were inte-
grated into the Council text, at least in principle. Concerning other amendments, however, the
Council has not been in a position to accept them.

2.1. The following EP amendments have been accepted in principle or partly, but integrated into the

text with modifications:

Amendments 26 and 11 — New recital 7a (now: 8) and Article 1(3) amending Article 4(b) of Directive
72/166/EEC
(Clarification on the derogation for agricultural vehicles)

The Council has integrated the main content of these amendments by maintaining the existing
derogation for agricultural vehicles. However, the issue behind, the protection of all kinds of
victims in the case of cross-border traffic, has been solved by invoking the guarantee fund proce-
dure instead of demanding a special insurance when leaving the registration state. Furthermore, a
provision on a reporting period has been brought into the text as a compromise.

Amendments 25 and 27 — New recital 8a (now: 10) and Article 2 modifying Article 1, paragraph 2 of
Directive 84/5/EEC
(Minimum amounts of insurance cover)

Notwithstanding the legitimate aim of enhancing the protection of victims, the Council had to
take into account the different situations in Member States and acceding countries concerning a
manageable increase of amounts in an adequate time frame. Although a full introduction of the
figures suggested by Parliament was not possible, the figures fixed in the Common Position and
the transitional period laid down take on board the main objectives of the amendments.

Amendment 5 — Deletion of recital 20
(‘Reasoned offer’ — procedure)

The deletion of the whole recital on the ‘reasoned offer’ procedure could not be supported.
Instead the Council has preferred an additional clarification and the deletion of the second
sentence only, which, however, should cover part of Parliament's concerns, namely to avoid a
reference to the claims representative (see also amendment 20).

Amendment 20 — Article 4, point 4, inserting Article 4e into Directive 90/232/EEC
(Relationship between provisions on the ‘claims representative’ and the ‘Green Card’-office)

The Council has taken on board the EP amendments to a large extent. The clarification of the role
of the claims representative and the maintenance of the Green Card office procedures, also for the
cases described here, serve good administrative practice and do not counteract any substantive
objective of the proposal.

(1) See doc. 13585/03. Draft amendments 3 and 13 were not voted favourably, their substance being covered by amend-

ments 25 and 27.

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Amendments 7 and 21 — New recital 21b (now: 24) and Article 5, point 1 modifying Directive
2000/26/EC
(Replacement, when appropriate, of the Brussels Convention by Regulation 44/2001 concerning a provision
on the place of establishment)

The Council has integrated these amendments in substance. However, by amending Article 4 of
Directive 2000/26/EC, the Council has made it clear that a mere recital would not be sufficient in
this regard.

Amendment 14 — Article 2, modifying Article 1, paragraph 6, subparagraph 2 of Directive 84/5/EEC
(Exclusion of an option not to compensate when the victim has been in hospital)

The Council has accepted the substance of the EP amendment. However, in order to ensure the
necessary flexibility for Member States and as a consequence of changes brought about in the
preceding paragraph of the Article, the Council has adapted the wording of the proposed amend-
ment.

Amendment 15 — Deletion of Article 4(2) inserting a new Article 1a in Directive 90/232/EEC
(Insurance cover for pedestrians and cyclists)

The Council has acknowledged that the aim of the provision to harmonise the provisions for the
insurance cover for pedestrians and cyclists and other non-motorised users of the roads might be
too difficult to achieve along the proposed lines. However, instead of deleting the suggested provi-
sion altogether — as the Parliament had suggested — the Council has preferred to clarify the
provision by mentioning the entitlement to compensation according to national law as a relevant
safeguard. Thereby the principle of inclusion of these non-motorised users of the roads would be
maintained without running the risk of prejudging national decisions on entitlement to compensa-
tion via this Directive.

Amendment 18 — Article 4, point 4, inserting Article 4b into Directive 90/232/EEC
(Information to be provided to the policy-holder)

The Council has integrated the main ideas of the EP amendment. The relevant information should
be available upon request by the policyholder at any time during the duration of the insurance
contract. Thereby consumer protection should be enhanced and at the same time an unnecessary
delivery of letters can be avoided. The differences between the Council text and the EP amendment
mainly concern editorial points.

2.2. The following amendments have been rejected and have not been integrated into the Council

text:

Amendments 1, 6, 9 and 23 — New recitals 3a and 21a; Article 1, point 1 (new) and new Article 5a
(Definition of trailers and introduction of special provisions applying to them)

The Council has not been in a position to accept the amendments on ‘trailers’. Although the issue
of accidents with trailers as such might deserve further consideration, the Council does not share
the view that the lack of coherent registration of towing engines and trailers is currently a predo-
minant problem. Moreover, the harmonisation of the different national provisions regarding
number plates for towing machines and trailers would go beyond the objective of the insurance
directives.

Amendments 2 and 12 — New recital 7b and Article 2, point 1
(Inclusion of the costs of pursuing claims in legal proceedings)

The Council has not been in a position to accept these EP amendments. In its view, the cover of
the costs of legal proceedings constitutes a modality of voluntary insurance and is already
addressed in a specific insurance directive. Moreover, the regime of legal expenses differs widely
between Member States and the inclusion of compulsory cover might lead to the negative side-
effect of reducing the number of out-of-court agreements.

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Amendments 4 and 19 — New recital 19a and Article 4, Point 4, inserting Article 4d, point 1a (new)
into Directive 90/232/EEC
(Limitation period for direct right of action)

The Council has not considered it useful to introduce a harmonization of the periods within
which the victim can claim a damage. The reasons are the different legal traditions and situations
in the Member States and the fact that not only the starting point of this period, but also the
provisions regarding an interruption or standstill of the period differ considerably. Moreover,
harmonisation of these periods would go beyond the objective of the non-life insurance directives.

Amendments 8 and 24 — New recital 21c and Article 5, point 2a (new)
(Creation of a central body for gathering information on accidents)

The Council has not supported a strict obligation to create a central information body. Although
the aim of better and faster information to all parties concerned, especially the persons having
suffered a damage, is acknowledged, the suggested provision is not clear enough to determine
how Member States should fulfil such an obligation and whether any enforceable right against a
Member State could be derived in the context of this directive. The creation of such a centre,
which would collect police information, would also go beyond the objective of the non-life insur-
ance directives.

Amendment 10 — Article 1, point 2, modifying Article 2, paragraph 1 of Directive 72/166/EEC
(Possibility of checks)

The proposed amendment seeks to avoid the exclusion of the possibility regarding systematic
checks on the insurance status of vehicles, which might be necessary in the view of some Member
States. However, the Council has preferred to stay closer to the Commission's proposal and takes
the view that the last sentence of the provision offers a sufficient balance between all interests
concerned and gives some flexibility for Member States' authorities.

Amendment 28 — Article 2, modifying Article 1, paragraph 3 of Directive 84/5/EEC
(Revision of amounts)

The Council has not considered it advantageous to replace the provision of the Commission's
proposal by the one suggested in the EP amendment. Firstly, the provision proposed by the
Commission aims at a periodic review of amounts in order to avoid that they are eroded by infla-
tion (as is also explained in the relevant recital). The proposed amendment cannot replace this
inflation provision. Secondly, the proposed amendment would mean that the result of a future
analysis of the experience to be gained would be pre-empted (‘shall be revised upwards’).

Amendment 16 — Article 4(3) modifying Article 2 of Directive 90/232/EEC
(Scope of insurance cover)

The Council has not considered it useful to take on board the EP amendment. It might give the
impression of limiting the temporal or territorial applicability of the relevant provision and thus
impair the objective of easier circulation of insurance holders.

Amendment 17 — Article 4(4) inserting Article 4a into Directive 90/232/EEC
(Definition of the Member State where the risk is situated)

The Council has not been able to accept the EP amendment, since a clear definition is necessary
of which Member State is to be regarded as the State where the risk is situated. The Council has
therefore preferred to stick to the Commission's proposal.

Amendment 22 — Article 5, new point
(Obligation to make a ‘reasoned offer’)

The Council has rejected this amendment for reasons of legal technique as a consequence of the
rejection of amendments 2 and 12.

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3.

IMPORTANT INNOVATIONS TO THE TEXT INTRODUCED BY THE COUNCIL

Article 1(5), now: Article 1(4) — Clarification of the scope of Directive 72/166/EEC

The reference to the non-European territory of the Member States in Articles 6 and 7(1) of Direc-
tive 72/166/EEC was deleted in order to clarify the current scope of application of the Directives.

Article 4(4) inserting Article 4e into Directive 90/232/EEC
(Green Card Offices and technical clarification)

The Council has followed partly EP amendment 20 by changing the Commission's proposal in
order to replace the suggested role of the claims representatives by a streamlined role of the
Green Card offices. In doing so, the provision in question was clarified and considerably shor-
tened. Moreover, the Council has extended the application of the reasoned offer procedure
provided for in the Fourth Motor Insurance Directive to the Green Card Offices. In this regard, a
reference has been added to Article 1(3) of Dir. 72/166/EEC in order to make clear that references
to ‘insurance undertakings’ can be interpreted as references to the green card offices in the cases
described.

4. CONCLUSION

The Common Position adopted by the Council is fully in line with the main objective of the
Commission's proposal. Although certain provisions take greater account of national options, the
Directive will fulfil the aim of simplifying administrative provisions in a more efficient internal
market for motor vehicle insurance, while at the same time taking full account of the interest of
better protection for consumers and potential victims. The Council has furthermore been in a
position to accept some of the most central EP amendments, at least partly or in substance, in an
effort to meet Parliament's concerns and to follow good legislative practice on a number of impor-
tant points.