COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/103/EC of the European Parliament and the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability
Date: 2018-05-24
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU Member State, compulsory insurance, financial solvency, insurance claim, insurance indemnity, insurance law, motor vehicle insurance, third-party insurance, transport accident

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2018  SWD(2018) 247 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/103/EC of the European Parliament and the Council of 16 September 2009 relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability {COM(2018) 336 final} - {SEC(2018) 248 final} - {SWD(2018) 248 final}  
 
 
Table of Contents 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................. 3 

PROBLEM DEFINITION .................................................................................................. 5 

WHY SHOULD THE EU ACT? ...................................................................................... 22 

Legal Basis ................................................................................................................ 22 
Subsidiarity: Necessity of EU Action ....................................................................... 22 
Subsidiarity: Added value of EU Action ................................................................... 22 
Consistency of the objectives with other EU policies ............................................... 23 
Consistency of the objectives with fundamental rights ............................................. 23 

WHAT ARE THE POLICY OPTIONS AND THEIR IMPACTS AND HOW DO 

THEY COMPARE? .................................................................................................. 23 

What is the baseline scenario? ................................................................................... 24 
Policy options addressing insolvency of the insurer ................................................. 27 
Policy options to ensure that minimum amounts of cover are equal across the 

EU .................................................................................................................... 34 
Policy options addressing uninsured driving ............................................................. 39 
Policy options addressing the acceptance of claims history ...................................... 46 

PREFERRED OPTION ..................................................................................................... 53 

Overall impact of the preferred option ...................................................................... 53 
Macro-economic impacts .......................................................................................... 55 
Small and medium-sized enterprises ......................................................................... 56 
REFIT (simplification and improved efficiency) ...................................................... 57 
EU budget .................................................................................................................. 57 
Social impacts ............................................................................................................ 57 
Impact on third countries ........................................................................................... 58 
Environmental impacts .............................................................................................. 58 

HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? ............... 58 

ANNEX  1:  PROCEDURAL  STEPS  CONCERNING  THE  PROCESS  TO 
PREPARE THE IMPACT ASSESSMENT REPORT AND THE RELATED 
INITIATIVE .............................................................................................................. 60 

ANNEX 2: STAKEHOLDER CONSULTATION SYNOPSIS REPORT ....................... 61 

ANNEX 3: WHO IS AFFECTED AND WHY? ............................................................... 78 

ANNEX  4:  MARKET  DATA  DESCRIPTION  AND  ANALYTIC  MODELS 

USED TO PREPARE THIS IMPACT ASSESSMENT. .......................................... 87 

ANNEX 5:  GLOSSARY OF TERMS AND ABBREVIATIONS. ............................... 100 

1 

 
 
 
ANNEX  6: VOLUNTARY  INDUSTRY CODE OF CONDUCT FOR CLAIMS 

HISTORY STATEMENTS ..................................................................................... 102 

ANNEX 7: EVALUATION REPORT ............................................................................ 104 

ANNEX  8:  (CONFIDENTIAL*):  FINANCIAL  VOLUME  OF  INSOLVENCY 
CASES FALLING UNDER  THE SUBJECT MATTER REGULATED BY 
THE 1995 AGREEMENT ....................................................................................... 143 

ANNEX 9: (CONFIDENTIAL*) UNINSURED DRIVING IN THE EU ...................... 144 

ANNEX  10:  INSOLVENCY:    VOLUNTARY  AGREEMENTS  BETWEEN 

MEMBER STATES ................................................................................................ 145 

ANNEX 11: SCOPE OF THE MOTOR INSURANCE DIRECTIVE: LACK OF 
UNIFORM  APPLICATION  OF  THE  MATERIAL  AND  TERRITORIAL 
SCOPE OF THE MOTOR INSURANCE DIRECTIVE ACROSS THE EU ......... 151 

ANNEX  12:  DETAILED  DESCRIPTION  OF  KEY  PERFORMANCE 

INDICATORS ......................................................................................................... 157 

2 

 
 
 
 
 
INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

The first EU Directive on motor insurance1 was adopted in 1972, with the dual objectives 
of  protecting  victims  of  motor  vehicle  accidents,  (with  or  without  a  cross-border 
element), and facilitating the free movement of motor vehicles between Member States. 
The  foundations  of  EU  motor  insurance  legislation  lie  in  the  International  Green  Card 
System (see Box 1), but the EU legislation goes further. Since 1972, several amendments 
have  progressively  strengthened  the  Directive  and  enhanced  its  provisions.  Five  motor 
insurance  Directives  were  consolidated  into  Directive  2009/103/EC  (hereafter  the 
Directive or MID). Key elements of the Directive include: 

  An  obligation  on  motor  vehicles  to  have  a  motor  third  party  liability  (MTPL) 
insurance policy, valid for all parts of the EU on the basis of a single premium. 
  Obligatory  minimum  amounts  of  cover  which  such  insurance  policies  must 

provide (Member States may require higher cover at national level). 

  A prohibition on Member States from carrying out systematic checks of insurance 

of vehicles. 

  An  obligation  on  Member  States  to  create  guarantee  funds  for  compensation  of 

victims2 of accidents caused by uninsured or untraceable vehicles. 

  Protection  for  victims  of  motor  vehicle  accidents  in  a  Member  State  other  than 

their Member State of residence ("visiting victims"). 

  A right for policyholders to obtain a statement of their claims history for the past 

five years from their insurer. 

Box 1: International Green Card system and EU Motor Insurance Legislation 
The  Green  Card  is  an  international  certificate  of  third  party  liability  insurance  that  makes  it 
possible for travellers to drive cross-border without having to buy supplementary insurance. The 
system is run by a Council of Bureaux and was set up in 1949 under the auspices of the United 
Nations Economic Commission for Europe (UNECE). There are three categories of Green Card 
Members: EEA Member States, Members under Section III of the Internal Regulations (Andorra, 
Croatia,  Serbia  and  Switzerland)  and  standard  Green  Card  Members.  Vehicles  from  EEA 
Member  States  and  Section  III  States  can  travel  freely  between  the  relevant  territories  even 
without  the  Green  Card  as  the  number  plates  of  vehicles  from  such  Member  States  are 
presumed to be the proof of insurance.  
The  evolution  of  EU  motor  insurance  legislation  involved  the  adoption  of  five  successive 
Directives,  continuously  improving  the  legal  framework  and  strengthening  the  protection  of 
victims of traffic accidents. The first Directive of 1972 set out the obligation for all vehicles to be 
covered  by  a  MTPL  insurance  policy  and  mandated  the  abolition  of  border  checks  on  motor 
insurance; it also made it possible for Member States to derogate some natural or legal persons' 
vehicles or certain types of vehicles. The second Directive of 1983 imposed for the first time the 
minimum amounts of cover, obliged Member States to set up compensation bodies for uninsured 

1    Council Directive 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. 

2   The  Directive  uses  both  terms  "victim"  and  "injured  party"  to  encompass  persons  covered  by 
protection  afforded  by  it.  For  the  sake  of  simplicity,  the  term  "victim"  will  be  used  throughout  this 
report. 

3 

 
 
 
 
                                                            
or  untraced  drivers  (also  known  as  national  guarantee  funds)  and  prohibited  certain  exclusion 
clauses  in  insurance  contracts.  The  Third  Directive  of  1990  established  the  principle  that  the 
insurance cover should include the whole territory of the EEC on the basis of a single premium 
and  stipulated  that  in  the  cases  of  disputes  on  which  an  insurer  or  body  should  pay  the 
compensation,  the  victim  must  be  compensated  without  delay  irrespective  of  the  dispute.  The 
Fourth Directive of 2000 introduced facilities for  the protection of 'visiting victims"; to that end it 
required Member States to set up information centres and compensation bodies, and imposed an 
obligation for insurers to have claims representatives in other Member States. The Fifth Directive 
of  2005  banned  systematic  border  checks  on  insurance,  required  cover  for  damage  both  to 
property and personal injuries, established guarantees for compensation for victims of accidents 
involving vehicles that are exempt at Member State level, codified case law on exclusion clauses, 
provided for specific cover for exported vehicles, prohibited "excess" or "co-pay" against victims 
and also required insurers to provide five years of claims history statements for policyholders. 
All these Directives were consolidated into Directive 2009/103/EC. All references in this text are 
made in relation to this Directive. 

To assess the effectiveness, efficiency and coherence of the motor insurance legislation, 
the Commission Work Programme 2016 announced an evaluation of the Directive3. A 
public consultation was held between July and October 2017, and the evaluation report is 
annexed  to  this  Impact  Assessment  (see  Annex  7).  The  evaluation  looked  into  all 
elements of the Directive, including for example terminology and definitions, insurance 
checks, visiting victims and autonomous vehicles. The evaluation identified a number of 
issues which are further assessed in this impact assessment: the protection of victims of 
accidents in cases of insolvency of an insurer, minimum amounts of cover, portability of 
claims history statements (which are used to calculate no-claims discounts), and checks 
on insurance of vehicles.  

Furthermore,  in  the  Consumer  Financial  Services  Action  Plan  of  March  20174,  the 
Commission  announced  that,  following  an  evaluation,  it  would  decide  promptly  on 
possible  amendments  to  the  Directive  to  enhance  the  protection  of  traffic  accident 
victims and to improve the cross-border portability of claims history statements5. 

There  have  also  been  in  recent  years  a  number  of  ECJ  judgments  clarifying  the 
scope  of  the  Directive.  Against  a  background  of  linguistic  differences  in  different 
language  versions  of  the  Directive,  the  CJEU  has  interpreted  the  scope  in  a  number  of 
preliminary rulings. Particularly noteworthy judgements of the CJEU have been those in 
the  so-called  "Vnuk",  "Andrade"  and  "Torreiro"  cases6.  The  Vnuk  judgement  of 

3   See  the  Inception  Impact  Assessment  of  24  July  2017,  available  here.  The  completion  of  the 
Evaluation  was  postponed  in  order  to  await  the  "Andrade"  judgement  of  the  CJEU,  delivered  on  28 
November 2017 and the "Torreiro" judgment of the CJEU, delivered on 20 December 2017. 

4   COM(2017) 

23 
content/EN/TXT/?uri=CELEX:52017DC0139 

final 

139 

of 

March 

2017, 

http://eur-lex.europa.eu/legal-

5   These issues are discussed in sections 2.1.1. and 2.2.2. below. 

6   See Annex 11 for more details of the different rulings including the Vnuk judgement of 14 September 

2014 (C-162/2013). 

4 

 
 
 
 
 
                                                            
September 2014 in particular clarified the scope of application of the Directive (the types 
and  uses  of  motor  vehicles  for  which  an  MTPL  insurance  policy  is  obligatory)  in  a 
manner different to that in which it was hitherto implemented in certain Member States, 
leading  to  requests  from  certain  Member  States  and  stakeholders  in  the  public 
consultation to re-examine the appropriate scope of the Directive. Since it is proposed to 
codify  the  ECJ  rulings  in  the  MID,  and  not  change  the  scope  of  the  Directive  as 
interpreted by the Court, the proposed legislative change is not subject to detailed impact 
assessment but explained and analysed in section 2.3 and Annex 11.    

Following  the  evaluation  and  against  the  background  of  applicable  frameworks 
(international Green Card System, EU and national rules, applicable law and multilateral 
agreements), it was concluded that overall the provisions of the Directive function well. 
At  the  same  time,  the  evaluation  showed  that  a  number  of  specific  elements  of  the 
Directive  merited  targeted  amendments,  including  those  aspects  highlighted  in  the 
Consumer  Financial  Services  Action  Plan.  These  are  discussed  in  the  present  impact 
assessment.  

PROBLEM DEFINITION  

The  main  problems  identified in  this  impact  assessment  (see  problem  tree)  concern  the 
following issues:  

1) Insufficient/unequal protection of injured parties in certain circumstances (insolvency 
of insurers, inconsistend minimum amounts of cover), and  

2)  Differential  treatment  and  freeriding  behaviour  negatively  affecting  policyholders 
(differentiation  between  claims  history  statements  by  insurers  in  cross-border  cases, 
increased premiums due to uninsured driving). 

An additional problem,  the lack of uniform application of the scope of the MID across 
the EU in particular in light of recent ECJ judgements, was identified by the evaluation 
and  the  possible  scenarios  for  this  topic  are assessed  in  Annex  11.  As  explained  in  the 
introduction, for this topic the proposed policy choice was a codification of existing case-
law and therefore does not require impact assessment according to the guidelines, but it is 
desirable to record the reasoning.  

Four  problem  drivers  underly 
these  problems:  absence  of  EU-wide  rules  on 
compensation  of  victims  for  cross-border  cases  of  insolvent  insurers,  inconsistent 
minimum  amounts  of  cover  for  motor  insurance  across  Member  States,  risks  due  to 
uninsured  driving  (which  can  lead  to  higher  premiums  for  policyholders),  and  lack  of 
acceptance  of  claims  history  statements  by  insurers  in  case  of  policyholders  moving  to 
another Member State. 

 Insufficient/unequal protection of victims in certain circumstances 

Insufficient or unequal protection of injured parties across the EU arises from absence of 
rules  for  compensation  in  cases  of  insolvency  of  an  insurer  and  unequal  minimum 
obligatory amounts of insurance in different Member States. 

5 

 
 
 
 
2.1.1. Compensation of victims in the case of insolvency of an insurer  

According to the Directive compensation bodies7 must be set up in each Member State to 
meet  costs  arising  from  accidents  caused  by  uninsured  or  untraced  vehicles.  However, 
such bodies are not currently required to meet costs arising from claims where the motor 
insurer of the liable party is insolvent. This means that, if national law does not provide 
for any specific protection scheme, victims of accidents caused by a vehicle insured with 
an  insolvent  MTPL  insurer  may  be  left  without  compensation8.  As  a  consequence,  in 
recent cases9 as shown in confidential Annex 8 where an insolvent insurer was providing 
services across-borders under the free provision of services it was not clear which party 
was ultimately responsible for refunding claims of victims, and delays in compensation 
of victims occurred.  

An  accident  which  involves  a  liable  party  with  an  insolvent  insurer  poses  two  main 
issues.  First  of  all,  to  ensure  an  effective  and  efficient  protection  of  victims,  it  is  not 
always clear which compensation body is responsible for the initial compensation of the 
victim  ("front  office").  Second,  to  allow  for  fair  risk  sharing  in  case  of  cross-border 
provision of services it is unclear who bears the ultimate financial responsibility for the 
claim  ("back  office").  For  cross-border  cases,  this  could  be  the  guarantee  fund  of  the 
home  Member  State  of  the  insolvent  insurer  or  alternatively  the  guarantee  fund  of  the 
host  Member  State.  As  the  MID  does  not  deal  with  this,  it  depends  on  national  law, 
which might not cover cross-border cases, and therefore the level of protection of victims 
of  accidents  in  case  of  insolvency  of  an  insurer  is  currently  unequal  across  Member 
States.  

As shown in the evaluation report (Annex 7), which provides a detailed overview of all 
possible  insolvency  scenarios,  a  distinction  is  made  between  domestic  cases  and  cases 
with a cross-border dimension (Tables 8 and 9).  

For  insolvencies  which  involve  insurers  that  are  based  in  the  same  Member  State, 
according to the Council of Bureaux (CoB), all but one Member State (Sweden) have put 
in place mechanisms to deal with such insolvencies domestically. However, the level of 
protection of victims by these domestic schemes is sometimes lower than the protection 
foreseen  in  the  MID.  As  a  consequence,  in  case  of  insolvency  without  cross-border 
provision of services (and in the absence of application of a voluntary agreement between 
Member States – see Annex 10), victims are not always fully protected in all EU Member 
States and therefore might not be compensated or only partly compensated. Furthermore, 
victims might be compensated in accordance with national requirements but not in  full, 
unlike for accidents caused by uninsured or untraced vehicles. 

7   This obligation is provided by Article 10 of the MID, on "Body Responsible for compensation". 

8   Compensation in cases of insolvency are not covered by guarantees of article 10 compensation bodies, 

this was clarified in case CJEU C-409/11Csonka.  

9   A detailed list of recent insolvency cases and their consequences can be found in confidential Annex 8. 

6 

 
 
 
 
 
 
                                                            
For cases where an insurer is selling MTPL policies cross-border either using freedom of 
services or a branch, a number of "voluntary agreements" between Member States have 
been  set  up  under  the  umbrella  of  the  CoB.  The  CoB  currently  administers  three 
voluntary  agreements  between  national  compensation  bodies,  one  for  domestic  (non-
visiting)  victims  of  accidents  (1995  Agreement)  and  one  for  visiting  victims  in  other 
Member  States  (2008  Agreement)  and  one  for  insolvency  cases  in  case  of  insurers 
operating  on  a  freedom  of  services basis (2006  Agreement).  However,  as  shown  in  the 
evaluation  report10,  these  voluntary  agreements  have  some  deficiencies  as  they  are  not 
mandatory,  thus  do  not  cover  all  EU  Member  States,  and  contain  negotiated  "opt-out 
clauses" or limitations for certain national guarantee schemes.  

Table  1:  Overview  of  rules  applicable  for  different  scenarios  of  insolvencies  of  an 
insurer: 
TYPE OF 
RULE 

DEFICIENCIES 

COVERAGE 

National 
Legislation 

National 
insolvencies 

CoB 1995 
Agreement 

Domestic (non-
visiting) victims 
of accidents 

CoB 2006 
Agreement 

Visiting victims 
in other Member 
States 

CoB 2008 
Agreement 

Insolvency cases 
in case of insurers 
operating on a 
freedom of 
services basis 

Source: Council of Bureaux 

GEOGRAPHICAL 
SCOPE 
All  EU  Member  States 
except SE 

EEA  with  the  exception 
of: 
HR,  LV,  LT,  LU,  MT, 
RO, IS, NO 

Reservations by  
BG, IT, IE, PT, SE, UK, 
EEA  with  the  exception 
of BG, HR, LV, LT, LU, 

Derogations made by, IE, 
MT, UK, LI. 

EEA  with  the  exception 
of  EE,  HR,  IE,  RO,  SE, 
UK, IS, NO 

scope; 

Lower  level  of  compensation  of  victims 
compared  to  MID  in  some  Member 
States 
the 
Incomplete  geographical 
agreement  was  modified  on 
some 
occasions  and  not  all  Members  States 
signed the modifications.  
Voluntary 
Reservations  made  by  some  Member 
States 
Incomplete geographical scope 

Derogations 
signatories 

announced 

by 

some 

Only applicable to situations of FoS and 
not FoE. 
Incomplete geographical scope 

Not  applicable  in  case  the  accident 
occurred  in  an  EEA  country  other  than 
where the vehicle is normally based 

Not  applicable  if    the  national  law  does 
not foresee intervention of the Guarantee 
fund in case of insolvency 

For cross-border activities, according to the CoB11, the voluntary agreements that tackle 
this  issue  have  shown  in  practice  a  number  of  significant  flaws.  In  particular,  some 
national  bodies  have  not  signed,  some  others  have  withdrawn  from  agreements 
previously  signed  and  some  have  signed  with  reservation  clauses  and  limits.  As  a 

10   Annex 7. See also Annex 10 on voluntary agreements between Member States. 

11   In their contribution to the public consultation, a summary of the public consultation can be found in 

Annex 2. An assessment of the voluntary agreements can be found in Annex 12. 

7 

 
 
 
 
 
 
 
 
 
                                                            
consequence, in recent cases (See confidential Annex 8 for a list of recent cross-border 
failures  of  motor  insurers)  where  an  insolvent  insurer  was  providing  services  across-
borders  it  was  often  not  clear  which  party  was  ultimately  responsible  for  refunding 
claims of victims, and delays in compensation of victims occurred while discussions or 
litigation occurred. 

This  demonstrates  that  in  some  national  or  cross-border  cases  of  insolvency  of  the 
insurer, victims will not always be protected at the same level. In absence of a voluntary 
agreement or in case of specific opt outs, victims risk not being compensated in a timely 
and  full  manner  in  line  with  the  deadlines  set  out  in  the  CoB  internal  rulebooks.  In 
particular, evidence from recent insolvency cases (see Box 2 below for one example) has 
shown  that  victims  are  likely  to  experience  negative  consequences.  These  include 
considerable  delay  in  payment  of  claims  due  to  ongoing  court  proceedings  or  claims 
which  are  reimbursed  only  partially.  This  implies  that  victims  could  be  compensated 
considerably less and with a longer delay than if they were victim of an accident in case 
of an uninsured or untraced vehicle.  

As shown in the evaluation report in Annex 7 and in confidential Annex 8, in the period 
1998-2017, eight cases of insolvency of such insurers have been reported affecting nine 
Host  Member  States  (and  based  in  five  home  Member  States).  Based  on  a  preliminary 
estimation  due  to  ongoing  cases,  there  were  approximately  11,500  claims  against 
policyholders of those insurers after their insolvency for a total value of  is approximately 
EUR 180 million12. This is certainly an underestimation of the total problem, as for 3 out 
of  8  insolvencies  information  on  claims  is  not  available.  A  rough  extrapolation  of  the 
total value leads to an approximate value of  EUR 288 million. One specific example is 
described in the box below. 

Box 2: Case study on insolvency: Setanta Ltd 

Evidence from delays in claims were reported for the insolvency of Setanta Insurance (“Setanta”) 
a  Maltese  incorporated  insurance  company  with  Irish  management  which  sold  motor  insurance 
cross-border  to  policyholders  in  Ireland  only.  Setanta  was  placed  into  voluntary  liquidation  in 
Malta in April 2014. More than two years later, in November  2016, there  were still 1400 claims 
unpaid for an estimated value of EUR 90 million13 to  the detriment of victims. If Setana  were a 
solvent insurer, the claims would have been treated without delay. 

Morover  there  was  a  court  case  in  Ireland  to  determine  whether  the  compensation  of  victims 
would be undertaken by the general Irish Insurance compensation fund (which would cover only 
65  percent  of  the  value  of  claims)  or  the  motor  insurance  bureau  (which  would  reimburse  100 
percent of the value of claims); no attempt was made to bring about compensation of victims by 
any body in Malta, as there was no legal possibility to do so.  On 8 of June 2017, an Irish court 
ruling  attributed  the  settlement  to  the  Irish  Insurance  compensation  fund  (ICF),  resulting  in  a 

12   Information from the Council of Bureaux. As some insolvency cases are still ongoing, there could be a 

further increase both in number of claims and total value. 

13   Information 

was 

at: 
https://www.irishtimes.com/business/financial-services/still-1-666-outstanding-claims-against-setanta-
insurance-1.2926779, consulted on 7 December 2017 

available 

example 

reported 

press, 

the 

for 

in 

8 

 
 
 
 
 
  
                                                            
payment of claims of up to 65 percent or €825,000, whichever is the lesser, to the detriment of 
victims of motor insurance accidents14.   

If  Setana  had  been  a  solvent  insurer,  or  even  in  case  of  an  accident  with  an  uninsured  or 
untraceable  vehicle,  the  claims  would  have  been  treated  without  delay  and  with  100%  of 
compensation (up to the minimum amounts laid down by the MID,  currently just over €6 million 
for  personal  damage  and  €1  million  for  material  damage  provided  in  the  Motor  Insurance 
Directive).  

Therefore, as demonstrated above, in the event of an insurer becoming insolvent, victims 
of traffic accidents have difficulties to obtain compensation in some Member States, in a 
timely way and in full. This is in particular in the case where the liable party is insured by 
a cross-border insurer. Furthermore, fair and effective risk-sharing in case of insovency 
and cross-border provision of services is not guaranteed. In the absence of clear rules on 
the ultimate liability of a claim in cross-border situations, a compensation fund which has 
reimbursed a victim in case of an insolvent insurer cannot get recourse to the fund of the 
home  Member  State  of  the  insolvent  insurer.  This  topic  was  highlighted  as  a  possible 
area for action in the 2017 Consumer Financial Services Action Plan. 

2.1.2. Insufficient level of cover of MTPL insurance 

The  Directive  lays  down  minimum  obligatory  amounts  of  cover  up  to  which 
compensation must be provided under a MTPL policy. These minimum amounts ensure 
that  there  is  a  sufficient  level  of  minimum  protection  of  victims  of  motor  vehicle 
accidents across the EU in case of personal injury and damage to property, irrespective of 
the category of vehicle. These amounts are reviewed every five years in order to take into 
account inflation. In the case of personal injury, the minimum amount of cover for most 
Member States is currently set at €1 220 000 per victim or in case of multiple victims €6 
070 000 per claim, irrespective of the number of victims. For cases of material damage, 
the minimum amount is determined at €1 220 000 per claim, independent of the number 
of victims15.  

However,  as  shown  in  the  evaluation  report  at  Annex  7  and  in  Annex  4,  a  number  of 
Member  States  currently  apply  lower  amounts  than  laid  down  in  the  Directive.  This  is 
due  to  different  reference  dates  for  periodically  recalculating  the  minimum  amounts. 
When the minimum amounts of cover were introduced in 2005 (Directive 2005/14/EC), 
some  Member  States  were  allowed  a  transitional  period  until  2012  to  apply  the  full 
minimum  amounts.  Although  the  transition  periods  have  meanwhile  expired,  the 
respective dates of the end of the transitional period are still used as reference dates for 
the periodic inflation updating. Therefore these minimum amounts are still not the same 
across all Member States. In addition, the procedure and timing of periodic adaptation of 
the minimum amounts in the Member States are not precise enough to allow for smooth 
adaptations.  In  particular,  the  procedure  lacks  a  clear  methodology  and  exact  reference 

14    See  http://www.kennedyslaw.com/casereview/setanta-liquidation-irish-supreme-court-finds-in-favour-

of-mibi/ 

15 This follows the most recent revision for those member States without transitional periods, which was 

calculated by the Commission in 2017 and notified to Member States. 

9 

 
 
 
 
 
                                                            
dates  to  calculate  inflation  and  does  not  provide  deadlines  for  Member  States  for  its 
implementation. As a consequence, the limits adopted in accordance with the procedure 
are not legally enforceable, resulting in different levels of obligatory minimum amounts 
of cover across Member States.   

Another question raised in the Commission's public consultation concerned the question 
whether the current minimum amounts of cover are sufficient to protect victims under all 
possible circumstances. In particular, accidents involving vehicles with a large number of 
passengers such as buses or coaches may result in a large number of claims concerning 
personal injuries. Accidents involving lorries may cause both personal injuries and severe 
material damage. Finally, vehicles transporting dangerous goods, such as chemicals, can 
cause  significant  environmental  damage.  There  is  anecdotal  evidence  that  in  some 
circumstances  the current  minimum  amounts  may not  be sufficient  to cover the cost of 
claims, especially where there are multiple victims. This is one of the reasons why some 
Member States (BE, CY, ES, FI, FR, IE, SE and UK) have set the minimum amounts of 
cover  considerably  higher  than  the  minimum  amounts  prescribed  in  the  Directive. 
Therefore it is possible that victims of accidents involving buses and coaches, lorries or 
vehicles  transporting  dangerous  goods  might  be  not  be  sufficiently  compensated  in  a 
number of Member States.  

Box 3: Examples of road accidents with heavy vehicles and buses and coaches 

According  to  the  European  Road  Safety  Observatory16,  in  2014,  there  were  3,850  fatalities  in 
road accidents involving heavy goods vehicles and 750 involving buses and coaches in the EU 
as a whole.  

Examples of accidents with buses and heavy vehicles resulting in high fatalities and high material 
damage: 

  15 December 2017: a train collided with a bus, close to Millas, France resulting in 5 fatalities 

and 15 wounded children17.  

  23 October 2015: bus accident in Puisseguin, France, resulting in 43 fatalities and 8 injured 

parties  (4 seriously injured). 

  13  March  2012:  a  bus  accident  involving  Belgian  citizens  following  a  crash  in  a  motorway 
tunnel between Sierre and Sion in Switzerland resulting in 28 fatalities (of which 22 children) 
and 25 wounded18.   

  2  June  2008:  bus  accident  in  Allinges,  France  resulting  in  7  fatalities  (children)  18  injured 

parties, of which 4 seriously injured.  

16   https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/statistics/dacota/bfs2016_hgvs.pdf 

17   Reported  in  the  press  on  15  December  2017:  http://ici.radio-canada.ca/nouvelle/1073300/france-

accident-train-autobus-scolaire 

18   Reported in the press: http://www.lavenir.net/cnt/dmf20120315_016 

10 

 
 
 
 
 
                                                            
  22 July 2007: accident with a bus transporting Polish citizens  at Laffrey, France, leading to 

26 fatalities. 

  17 May 2003: bus accident, in Dardilly France, resulting in 28 fatalities and 46 injured parties. 
  On  28  February  2001,  a  collision  between  a  car  and  a  train  in  Selby,  UK,  resulting  in  13 
fatalities and 70 injured parties of which 30 seriously injured, led to one of the largest motor 
insurance pay-outs for an accident in the UK, reaching approximately £50 million19. 

These examples show that very serious accidents with buses and heavy vehicles often involve a 
high number  of victims  and the total material damage can be high. As a consequence, in such 
case  the  current  minimum  amounts  of  cover  provided  in  the  MID  might  not  be  sufficient  to 
compensate all victims. In the Member States of the examples, this did not pose a problem as for 
respectively  France,  Belgium  and  UK,  the  minimum  amounts  of  cover  set  at  national  level  are 
above those provided for in the Directive. In BE, FR and UK guarantees for personal injury are 
unlimited. In BE the minimum amount for material damage is set at EUR 111 Million as shown in 
Table  10  in  the  Evaluation  at  Annex  7.  However,  it  is  of  course  possible  that  in  certain  such 
accidents  with  many  victims  the  vehicle  responsible  is  not  the  bus  or  heavy  vehicle  itself but  a 
smaller vehicle. 

It is relevant to note that data show that the overall amount of fatalities with buses and 
coaches  and  heavy  goods  vehicles  has  decreased  by  approximately  50  percent  in  the 
period 2005 to 2014 in the EU as a whole as shown in Figure 1.2 of Annex 4. This is an 
indication that there are fewer accidents overall and that accidents are less severe.  

Accidents  with  personal  injury  or  damage  beyond  the  levels  of  minimum  amounts  are 
exceptional. A recent study20 in France showed that since 1999, 1881 victims of severe 
accidents received in France compensation beyond EUR 1 Million, which is on average 
125 of such victims per year. The study shows that the number of such victims is steadily 
decreasing,  down  to  30  such  victims  in  2015.  On  the  other  hand,  the  average  costs  of 
compensation  for  these  victims  is  increasing  and  was  in  2015  estimated  at  EUR 
5,486,925  per  severe  injured  victim,  up  from  EUR  4,612,779  in  2014.  This  is  an 
indication  that  the  minimum  amounts  only  apply  in  a  limited  number  of  cases  of  very 
severe accidents with low frequency but with high average cost.  However even if there 
are  fewer  frequent  serious  accidents,  for  the  purpose  of  protecting  victims  of  motor 
accidents, in individual cases it, is important that the total cost of claims of serious motor 
accidents  can  be  covered  by  the  minimum  amounts  of  cover.    Therefore,  it  remains 
problematic if some Member States have lower minimum amounts, giving rise to risks of 
unequal protection of victims.  

Differential treatment and freeriding behaviour negatively affecting policyholders  

Policy  holders  of  motor  insurance  are  negatively  affected  by  freeriding  behaviour  and 
differential treatement which may result in increased premiums of MTPL insurance. The 

19   Reported in the press, consulted on 20 December 2017:  https://www.standard.co.uk/news/million-to-

one-accident-could-leave-50m-claim-6335090.html 

20   Study on the "Compensation of severe third party motor liability bodily injury claims in France", by 
at: 

Caisse  Centrale  de  Réassurance(  CCR),  published  October  2016, 
https://www.ccr.fr/documents/23509/29230/Plaquette+RC+auto+en+France+2016+VA.pdf/9af49b03-
d79c-44b7-a1ef-acb2000ad9d2 

available 

11 

 
 
 
                                                            
 
main drivers are unisured driving and the acceptance of claims history statements when 
moving across borders.  

2.2.1. Uninsured driving  

According  to  EREG21,  the  Association  of  European  Vehicle  and  Driver  Registration 
Authorities,  uninsured  driving,  in  essence,  circulating  with  a  motor  vehicle  without  a 
compulsory MTPL insurance, is an increasing problem within the EU.  The cost for the 
entire EU has been estimated by EREG at € 870 million in claims in 2011 for the EU as a 
whole..  

Uninsured  driving  negatively  affects  a  wide  range  of  stakeholders  including  victims  of 
accidents,  insurers,  gurantee  funds  and  motor  insurance  policyholders.  Victims  of 
accidents  caused  by  uninsured  drivers  do  not  receive  the  same  treatment  to  obtain 
compensation.  They  have  to  obtain  compensation  from  the  compensation  body  or 
relevant national body. To ensure compensation of victims of uninsured driving, article 
10  of  the  Directive  therefore  requires  Member  States  to  create  compensation  bodies, 
usually  guarantee  funds  or  National  Green  Card  Bureaux.  These  bodies  should  have 
recovery rights against the owners of uninsured vehicles who according to the Council of 
Bureaux  are  frequently  insolvent  or  bankrupt  and  unable  to  pay  back  the  uninsured 
claims. Insurers are therefore required to contribute to compensation bodies to cover for 
claims.  Insurers  also  miss  out  on  righfully  due  premiums  as  the  uninsured  do  not  pay 
premiums  and  thus  freeride  on  premiums  paid  by  regular  policy  holders.  According  to 
the  Council  of  Bureaux  and  insurance  associations,  the  costs  of  uninsured  driving  are 
transferred  to  honest  vehicle  owners  with  compulsory  motor  insurance,  increasing  the 
overall level of premiums for motor insurance.  

Uninsured driving is a problem shared between Member States and the EU and should be 
tackled both at national level within a single EU Member State and at the borders.  

At national level, Article 3 of the MID obliges Member States to "take all  appropriate 
measures to ensure that civil liability in respect of the use of vehicles normally based in 
its  territory  is  covered  by  insurance".    While  the  Directive  does  not  prescribe  which 
actions  should  be  taken,  Member  States  have  the  obligation  to  take  effective  action  to 
reduce  risks  of  unisured  driving.  They  are  allowed  to  conduct  domestically  systematic 
verification  of  MPTL  insurance  of  registered  policies,  establish  roadside  checks  and 
effective penalties for owners  of uninsured vehicle.  However,  according to  EREG, the 
current  verification  of  unisured  driving  at  national  level  often  are  not  sufficient. 
Sufficient verification would require good data quality for the databases with registered 
cars and compulsory  MTPL insurance,  and  sufficient exchange of information  between 
the different authorities responsible. As a consequence, there are still significant levels of 
uninsured driving across the EU as shown in  confidential Annex 9. In accordance with 
the  principle  of  subsidiarity,  to  address  this  problem  at  national  level,  Member  States 

21   EREG,  Topic  Group  XI  on 

tackling  uninsured  driving,  8  April  2013,  https://www.ereg-

association.eu/media/1120/final-report-ereg-topic-group-xi-tackling-uninsured-driving.pdf 

12 

 
 
 
 
 
 
                                                            
with high levels of uninsured driving should therefore set up all proportionate actions to 
reduce levels of uninsured driving at national level by conducting sufficient road checks, 
prevention campaigns and exchange of information between competent authorities.  

At  EU  level,  uninsured  driving  concerns  mainly  vehicles  that  circulate  beyond  the 
Member States where they are normally registered. It also concerns vehicles that are not 
registered  in  the  Member  State  where  they  are  normally  based,  but  in  another  Member 
State,  even  if  the  MID  requires  mandatory  registration  when  residing  more  than  six 
months in a given Member State. However, article 4 of the MID prohibits border checks 
of insurance on vehicles entering the national territory, as a hindrance to free movement 
of vehicles in the internal market (and indirectly, of persons and goods). This affects in 
particular  Member  States  with  neighbouring  countries  with  high  levels  of  uninsured 
driving (see confidential Annex 9).  

Overall,  there  remains  a  considerable  amount  of  vehicles  circulating  without  motor 
insurance  across  all  Member  States.  To  address  the  issue  of  uninsured  driving,  new 
technological  developments  (number  plate  recognition  technology)  allow  for  checks 
without  obstructing  vehicles.  These  new  tools  are  allowed  at  national  level  but  are 
explictly prohibited for cross-border traffic under article 4 of the current Directive, which 
prohibits all checks, including those not requiring the vehicle to be stopped. In addition, 
such verification of insurance of cross-border vehicles could not be effective without the 
exchange of data between Member States, which should be done in compliance with EU 
data protection rules.    

2.2.2.  Unfair  differentiation  between  claims  history  statements  by  insurers  in 

cross-border cases  

In  order  to  facilitate  switching  MPTL  insurance  and  to  avoid  fraudulent  benefits,  the 
MID stipulates that Member States must ensure the policyholder has the right to request a 
claims  history  statement  (article  16  of  the  Directive).  Such  information  may  help  a 
policyholder to obtain a "no claims bonus" (or a better "bonus-malus" rating) with a new 
insurer,  either  in  the  same  Member  State  or  another  Member  State,  thus  reducing 
premiums.  

Currently,  the  Directive  obliges  an  insurer  to  provide  such  claims  history  information 
covering the last five years, and it does not stipulate what use of that information must be 
made  by a new  motor insurer. Not accepting claims history has  the potential to unduly 
increase motor insurance premiums for mobile citizens. This topic was highlighted as a 
possible area for action in the 2017 Consumer Financial Services Action Plan.  

Insurers  have  underlined  during  the  public  consultation  that  claims  history  is  only  one 
factor  among  others  (e.g.  type  of  vehicles,  level  of  cover)  that  determine  the  ultimate 
level of premiums. However, in the insurance market of some Member States, the claims 
history remains an important factor in determining the level of premiums. Furthermore, 
national systems of "bonus/malus" are different; while in some Member States there are 
regulatory  schemes  to  calculate  no  claims  discounts,  others  have  industry  standards,  or 

13 

 
 
 
 
 
 
 
insurers  are  fully  free  to  determine  the  methodology  to  calculate  premiums.  Some 
insurers  do  not  use  this  type  of  discount  at  all.  The  cross-border  portability  of  claims 
history  across  the  EU  has  been  investigated  already  by  EIOPA  in  2013,  in  cooperation 
with Insurance Europe22. EIOPA considered in a letter to the Commission of 13 March 
2013 that one of the reasons for reluctance of some insurers may be lack of trust in the 
authenticity  of  claims  statements  originating  from  an  insurer  based  in  another  Member 
State.  As  an  outcome  of  the  analysis  then  performed,  Insurance  Europe  published 
'Guidelines  on  information  for  motor  insurance  claims  history  declarations  for  cross-
border  use'23,  including  common  elements  for  claims  history  statements,  aimed  at 
facilitating  the  circulation  of  information  on  claims  history  and  assessment  of 
bonus/malus  by  insurers  operating  in  two  distinct  national  markets.  The  guidelines 
however  are  not  binding  on  insurance  undertakings,  and  incorrectly  state  that  such 
statements are not obligatory.  

In its letter on cross-border issues in motor insurance, EIOPA highlighted that the use of 
claims  history  by  insurers  should  not  lead  to  cases  where  two  consumers  in  the  same 
situation are not treated equally by a given insurer. This would be the case if the claims 
history relating to those consumers affected the amount of premium to be paid by each of 
them  differently,  for  example  dependent  on  their  previous  place  of  residence  or  their 
previous insurer. EIOPA also pointed to shortcomings in the format of communication of 
data in claims history statements. In particular, the use of secured means of exchange of 
data between insurance undertakings could be beneficial, enabling better management of 
the  storage  and  sharing  of  data  originating  from  different  sources  and  a  more  reliable 
exchange of data among market participants.  

Box 4: Evidence of issues with claims history statements 
Concerning  the  treatment  of  claims  history  statements  when  policyholders  move  to  another 
Member  State,  there  is  no  quantitative  data  on  complaints  or  problems  experienced.  It  is 
therefore  difficult  to  quantify  the  dimension  of  the  problem.  However,  there  are  a  number  of 
indications of the existence of problems in this field. 

In the public consultation around 70 individuals reported non-acceptance of their no-claim history 
statements  abroad.  Two  respondents  gave  more  details  and  reported  the  non-acceptance  of  a 
French  and  a  Dutch  statement,  both  in  the  UK.  Other  respondents  to  the  consultation,  both 
institutional  and  private,  acknowledge  that  there  is  "some"  problem.  EIOPA  conducted  an 
analysis of this topic in 2012/2013 stating in a letter24 to the European Commission: 

"EIOPA  Members  indicated  that  some  insurers  may  be  reluctant  to  accept  claim  statements 
issued in another Member State due to lack of trust in the authenticity of such certificates." In a 

22   EIOPA letter dated 15 March 2013, EIOPA-CCPFI-12/051/GB/AdJ  

23   Insurance Europe, 'Guidelines on information for motor insurance claims history declarations for 

cross-border use' 
https://www.insuranceeurope.eu/sites/default/files/attachments/Guidelines%20on%20information%20f
or%20motor%20insurance%20claims%20history%20declarations%20for%20cross-
border%20use.pdf 

24   EIOPA letter dated 15 March 2013, EIOPA-CCPFI-12/051/GB/AdJ 

14 

 
 
 
 
                                                            
more  recent  letter25  to  the  European  Commission  EIOPA  states  "For  the  most  part,  it  is 
considered to be working well in some domestic markets, although there are particular difficulties 
in cross-border situations in ensuring a sufficient level of portability of claims history." 

The  Free  State  of  Bavaria,  one  federal  state  within  Germany,  stated  in  the  public  consultation 
that in cross-border mobility cases the acceptance of no claims histories is not always effective 
and could as a consequence create obstacles to cross-border mobility26. 

The Cost of Insurance Working Group of the Irish Department of Finance states in its report that 
only  a  small  number  of  insurers  is  willing  to  accept  EU  no-claims  statements  whereby  most  of 
them accept such statements from the UK27. 

In Germany, an insurance broker contacted many insurers asking them about the acceptance of 
foreign no-claims histories. At least six insurers of those who had responded stated that they do 
not take into account no claims histories from abroad. Among those is the insurer AllSecur, the 
online daughter of Allianz28. 

Problems related to the acceptance of foreign no-claim history statements in the UK are reported 
by an insurance broker29 and an expat forum30. 

Problems related to the acceptance of foreign no-claims history statements in Italy are mentioned 
in an expat forum31. 

The UK, Germany and Italy are among the top destination countries for mobile EU citizens in the 
working age according to the Commission Annual Report on intra-EU Labour Mobility.32 

The remaining gaps in the use of no-claims history statements in cross-border cases are 
confirmed  by  anecdotal  evidence  through  complaints  from  citizens  who  move  across 
borders. These complaints indicate that insurers do not always accept or take into account 
claims history statement from foreign insurers. Individuals with no accidents during the 
last  five  year  would  normally  benefit  from  a  "no-claims  bonus"  and  a  corresponding 
lower  MTPL  premium.  However,  as  they  move  from  another  Member  State,  the  no-
claims history statement is sometimes not accepted by the potential insurer. 

25   EIOPA letter dated 30 October 2017, EIOPA -17/691 

26   Answer to Question 5 of part B of the public consultation. 

27   http://www.finance.gov.ie/wp-content/uploads/2017/07/170110-Report-on-the-Cost-of-Motor-

Insurance-2017.pdf, page 61, third paragraph 

28   http://www.preisagenturstuttgart.de/werden-ihre-auslaendischen-kfz-vorversicherungszeiten-

annerkannt/ 

29     https://www.keithmichaels.co.uk/specialist-car-insurance/expat-car-insurance/foreign-ncb/ 

30   http://www.spainmadesimple.com/insurance/car/no-claims/  ,  section  "Is  Spanish  No  Claims  Bonus 

Valid in the United Kingdom?" 

31   http://www.britishinitaly.com/help-with-car-insurance-in-italy/ 

32   http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=7981&furtherPubs=yes 

15 

 
 
                                                            
Market forces based on competition between insurers seem not to solve the probem. The 
main reason is that for insurers, the market segment of mobile citizens who move across 
borders  and  at  the  same  time  require  a  new  MTPL  insurance,  is  very  small  when 
compared with the national markets. For example, in 2014, the total number of working 
population  migrating  to  another  Member  State,  only  represented  0.5%  of  the  total 
population living in the EU-28 and only a fraction of these citizens own a vehicle and are 
required to obain a new MTPL insurance in the country of destination. Insurers therefore 
do  not  specifically  target  this  market  segement  and  consequently,  market  dynamics  are 
insufficient  to  overcome  this  hurdle.  Consequently,  while  small  compared  to  the  total 
volume of motor insurance, it is harmful for those mobile citizens concerned. 
A different treatment of a claims history statement from a citizen whose initial insurer is 
based  in  another  Member  State,  compared  to  a  citizen  with  the  same  risk  profile  at 
national  level,  is  a  case  of  discrimination  and  against  the  fundamental  principle  of  a 
single  market.  Such  discriminatory  treatment  based  only  on  the  previous  country  of 
residence  of  the  policyholder  and  not  in  other  objective  risk  factors  could  make  cross-
border mobility less attractive, constituting a barrier to the free movement of persons.  
A different treatment of a claims history statement from a citizen whose initial insurer is 
based  in  another  Member  State,  compared  to  a  citizen  with  the  same  risk  profile  at 
national  level,  is  a  case  of  discrimination  and  against  the  fundamental  principle  of  a 
single  market.  Such  discriminatory  treatment  based  only  on  the  previous  country  of 
residence  of  the  policyholder  and  not  in  other  objective  risk  factors  could  make  cross-
border mobility less attractive, constituting a barrier to the free movement of persons.  

2.3 Other factors outside the scope of this impact assessment 

In addition to the issues outlined above, the evaluation of the MID also covered a number 
of other topics. In particular: 

 (i) the scope of the directive in the light of a number of CJEU court rulings;  

(ii)  the  suitability  of  the  Directive  in  the  light  of  technological  developments  (electric 
bicycles,  segways,  autonomous  or  semi-autonomous  vehicles)  and  on  whether  the 
liability system it provides will suit future needs;  

(iii),the functioning of the system of protection of visiting victims;  

(iv) the functioning of insurance of exported vehicles; 

v) the consistency of its terminology and definitions.  

i) Codification of rulings on scope of the Directive 

As outlined in the evaluation report (annex 7), there are certain specific issues concerning 
the consistent application of the scope of the Directive which arose in connection with a 
number of CJEU rulings. The question of the scope of the Directive, and the codification 
of recent CJEU judgements into the Directive, are also considered in detail in Annex 11. 

The  evalution  showed  that  certain  Member  States  have  interpreted  the  obligation  for 
MTPL  insurance  as  laid  down  in  article  3  of  the  Directive  as  not  extending  to  all 

16 

 
 
 
motorised  vehicles  used  in  all  locations  and  for  all  purposes.  In  particular,  certain 
Member States do not impose domestically an obligation for MTPL insurance for certain 
uses  of  vehicles  outside  of  road  traffic.  The  uncertainty  about  the  exact  scope  of  the 
MTPL requirement as laid down in the MID was compounded by the terminology used 
in different language versions of the Directive. In particular, the English text refered to 
"the  use  of  vehicles"  as  falling  in  the  scope  of  the  Directive,  whereas  the  French  text 
referred to "circulation" instead of "use".33  

The  CJEU  has  clarified  the  scope  of  the  Directive  on  three  successive  occasions,  as 
described in Box 10 of annex 11. In the Vnuk ruling34 the Court ruled that any use of the 
vehicle  that  is  consistent  with  its  normal  function  should  be  covered.  In  Rodrigues  de 
Andrade35, the Court ruled that "normal function of the vehicle" is to be understood to be 
linked with its "transport" function and not any other function that a vehicle could have 
(e.g.  ploughing  in  case  of  a  motorised  plough).  In  Torreiro36,  the  Court  ruled  that  the 
characteristics  of  the  terrain  have  no  bearing  to  determine  whether  the  vehicle  is  in 
"normal  use"  or  not.  This  means  that  victims  are  protected  in  case  of  motor  accidents, 
regardless of the characteristics of the property or terrain on which the accident occurred. 
However,  the  use  of  the  vehicle  in  case  of  a  motor  accident  should  be  linked  to  its 
transport function and not to any other potential function it may have.  
Given the inherent risks of disorderly implementation in the case of no action, and as the 
described issues of scope arise essentially as a  result of CJEU rulings, the Commission 
considers  it  preferable  to  codify  these  rulings  in  order  to  ensure  legal  clarity.  The 
codification  of  the  CJEU  rulings  involves  explicitly  inserting  the  key  provision  of  the 
consecutive  rulings  on  the  scope  of  the  directive,  (including  VNUK,  Rodriges  de 
Andrade  and  Torreiro)  in  the  Directive.  This  would  involve  an  additional  definition  of 
"use of a vehicle". This would mean, as with no action, that the current material scope of 
the  Directive  remains  unchanged  as  clarified  in  the  CJEU's  rulings  on  "Vnuk"  and 
"Rodriges  de  Andrade"  and  Torreiro"  and  that  the  implementation  of  the  rulings  in 
national legislation would be verified by normal transposition checks. 
This  approach  would  allow  Member  States  to  implement  the  changes  implied  by  the 
rulings in an orderly and transparent fashion.  Furthermore, it would provide more legal 
certainty for stakeholders on the scope of the MID, as the court rulings would be directly 
transposed  into  national  legislation.  Codification  also  facilitates  the  enforcement  of  EU 
law in this domain, as it would be accompanied by a standard transposition exercise. In 
addition, it would provide Member States with sufficient time to implement the Court's 
interpretation  of  the  scope  of  the  Directive.  Infringement  procedures  would  only  be 
initiated  after  the  transposition  exercise  has  been  finalised  and  only  against  those 
Member  States  that  failed  to  transpose  correctly.  The  consequences  are  otherwise  the 

33  Article  3  in  French:"  Chaque  État  membre  prend  toutes  les  mesures  appropriées,  sous  réserve  de 
l’application de l’article 5, pour que la responsabilité civile relative à la circulation des véhicules ayant 
leur stationnement habituel sur son territoire soit couverte par une assurance." 

34 See Annex 11 box 10 for more details of the Vnuk judgement (C-162/2013). 

35  See Annex 11, box 10 for more details of the Rodrigues de Andrade judgement C-514/16 

36 See Annex 11, box 10  for more details of the Torreiro judgement (C-334/16) 

17 

 
 
                                                            
same  as  under  the  'no  action'  approach.  Enforcing  the  CJEU  rulings  directly  without 
codification would however not guarantee the same degree of uniformity across Member 
States.  

ii) New technological developments  

The  evaluation  assessed whether  the  Motor  Insurance  Directive  is  suitable  to  deal  with 
new technological developments such as new types of electric vehicles and autonomous 
vehicles.  

a) Electric bicycles and other types of new electric-vehicles. 

The  evaluation  (see  Annex  7)  demonstrated  that  new  types  of  motor  vehicles,  such  as 
electic bikes (e-bikes), segways, electric scooters etc, already fall within the scope of the 
Directive  as  interpreted  by  the  Court  of  Justice  in  its  case-law.  The  use  of  these  new 
types  of  electric  motor  vehicles  in  traffic  has  the  potential  to  cause  accidents  whose 
victims need to be protected and reimbursed swiftly.  

However, as part of the public consultation various associations representing the electric 
bike  (e-bikes)  industry  argued  that  requiring  third  party  liability  insurance  could 
undermine  the  uptake  of  e-bikes.  But  the  current  Directive  already  provides37  Member 
States  with  the  power  to  exempt  them  from  motor  third  party  liability  insurance.  If 
Member States were to exempt them in this way, the national guarantee funds would bear 
the costs of reimbursing victims of accidents caused by these new types of vehicles.  This 
provides the highest level of protection of victims without the need for any additional EU 
action.  In  particular,  victims  of  accidents  with  such  new  electric  vehicles  exempted  at 
national  level  in  accordance  with  article  5  of  the  Directive  would  be  reimbursed  in 
accordance  with  the  rules  set  out  in  the  Motor  Insurance  Directive.  At  the  same  time, 
such new electric vehicles would not be required to have motor insurance but the costs of 
claims  following  accidents  with  these  vehicles  would  be  covered  by  the  national 
compensation body set up for this purpose by the Member State that decided to exempt 
such new electric vehicles.  

b) Autonomous vehicles 

The evaluation also showed that according to the GEAR38 report, a considerable uptake 
of autonomous and semi-autonomous vehicles can be expected. The report projects that 
by  2025  autonomous  vehicles  could  represent  20  percent  of  global  vehicles  sold  and 
estimates that there will be 44 million vehicles at global level by 2030.  

37    Article 5 of the MID 

38   GEAR 2030,  High  Level  Group  on  the  Competitiveness  and  Sustainable  Growth  of  the  Automotive 
at: 
Final 

Industry 
https://ec.europa.eu/growth/content/high-level-group-gear-2030-report-on-automotive-
competitiveness-and-sustainability_en 

the  European  Union, 

report,  October 

available 

2017, 

in 

18 

 
 
 
                                                            
The  evaluation  shows  that  one  positive  impact  of  relevance  for  third  party  liability 
insurance  is  that  autonomous  vehicles  have  the  potential  to  drastically  reduce  road 
fatalities,  which  currently  mainly  occur  due  to  human  error39.  Nevertheless,  the 
evaluation also concludes that the obligation of the Directive to obtain mandatory motor 
third-party liability insurance also applies to autonomous or semi-autonomous vehicles. 
The main rationale is the continuous need to protect and compensate victims of accidents 
involving autonomous and semi-autonomous vehicles circulating within the EU. This is 
can be reasonably expected, as a number of accidents caused by autonomous and semi-
autonomous vehicles have occurred, and such vehicles can cause victims of road traffic 
accidents personal injuries and material damage needing to be compensated. 

The evaluation also demonstrated that it does not matter for the purpose of the Directive 
whether  the  policyholder  is  also  the  "driver"  of  the  vehicle".  Already,  for  non-
autonomous traditional vehicles, an accident may be caused by a driver who is neither the 
owner  of  the  vehicle  nor  the  policyholder  of  the  motor  third-party  liability  insurance 
linked to the vehicle, but still the victim of the accident may claim compensation under 
the  Motor  Insurance  Directive.  Consequently,  for  autonomous  or  semi-autonomous 
vehicles, for the purpose of the MID the absence of a driver is not relevant. The owner 
who has registered the vehicle is required to obtain a MTPL insurance and it is the MTPL 
insurance which will ensure the compensation of the victims in the event of an accident. 
In a second step, which falls outside the scope of the Directive, in the event of a potential 
deficient  functioning  of  the  self-driving  car,  the  insurer  may  seek  recourse  against  the 
manufacturer.    

iii) Protection of visitors 

In  contrast  to  the  Green  Card  system,  which  protects  victims  of  accidents  caused  by 
visiting drivers the MID also provides protection for victims of an accident in countries 
where  they  are  not  residents  (visitors)  40.  To  that  end,  Member  States  must  require 
insurers  from  other  Member  States  to  appoint  claims  representatives.  The  protection 
scheme  does  however  not  offer  the  same  guarantees  as  exists  within  the  Green  Card 
system. Consequently, claims representatives wish to be certain of being reimbursed by 
an insurer before compensating a victim and usually await the advanced payment of the 
insurer  before  compensating  the  injured  party.  Therfore,  in  the  interest  of  victims,  it 
might  be  useful  to  consider  the  guaranteeing  of  compensations  paid  by  claims 
representatives to injured parties. Nevertheless, this issue should be further monitored to 
determine the frequency and magnitude of this issue and the impact in terms of delays in 
reimbursement of injured parties. 

iv) Insurance of dispatched vehicles 

39   Multiple studies exist on accident causation sources; see GEAR 2030, referred to in footnote 98. 

40 Under the green card system, citizens of a given Member State which have an accident with a driver of a 
vehicle registered in another member country part of the Green Card system are protected. Under the 
Motor  Insurance  Directive  visiting  victims  are  protected.  This  means  that  the  Motor  Insurance 
Directive also protect EU citizen which are visiting another Member State and have an accident with a 
driver of a vehicle registered in that Member State or in any other Member State. 

19 

 
 
                                                            
Article 15 of the MID on dispatched vehicles was introduced in order to help consumers 
find MTPL insurance for a vehicle that has to be dispatched from one Member State to 
another.  A  number  of  practical  issues  and  gaps  in  claims  handling  in  the  event  of  an 
accident caused by a dispatched vehicle were alleged by stakeholders in the evaluation, 
but the extent and significance of such issues is unclear. Therefore, it should be further 
monitored what is the magnitude of the issue of insurance of dispatched vehicles in order 
to determine which would be the most appropriate approach to overcome such gaps. 

v) Consistency of terminology and definitions 

The evaluation in Annex 7 covered an assessment of the terminology and definitions of 
the Directive. The evaluation concluded that in a few areas it would be beneficial if some 
of the terminology used in the Directive were harmonised. This would however not entail 
any material changes to the content of the Directive.  

These issues are covered by the evaluation report in Annex 7 and remain out of scope of 
this impact assessment. 

20 

 
 
Problem Tree  

Absence of EU-
wide rules on 
compensation of 
victims for cross-
border cases of 
insolvent insurers 

Inconsistent minimum 
amount of cover for 
motor insurance 
across Member States 

Risks due to 
uninsured driving 

Lack of acceptance 
of claims history by 
insurers in case of 
policyholders moving 
borders.  

Insufficient/unequal protection of victims in 
certain circumstances (e.g. insolvency of 
insurer in some Member States, lower 
amount of insurance cover) 

Differential treatment and 
freeriding behaviour negatively 
affecting policyholders, especially 
in a cross-border context 

1. Uneven compensation of 
victims of traffic accidents  

2. Increased premiums for 
policyholders of motor 
insurance across the EU 

Cross-border problems: lack of 
cross-border provision and 
portability of personal pensions 

3. Barriers for the free movement of 
persons due to less favourable 
motor insurance premiums for 
mobile people 

21 

Analysed in Annex 11 

Ambiguous scope of 
the insurance 
requirement in the 
Directive (article 3) 
prior to recent CJEU 
judgements 

Inconsistent territorial and material 
application across Member States 
of the requirement for motor third 
party liability insurance  

Lack of legal certainty on scope of 
application of the MID  

Inconsistent application across 
Member States of the scope of the 
Directive for accidents unrelated to 
traffic  

s
r
e
v
i
r
D

s
m
e
l
b
o
r
P

s
e
c
n
e
u
q
e
s
n
o
C

 
 
 
  
 
 
 
 
 
  
 
 
 
 
 
WHY SHOULD THE EU ACT? 

Legal Basis 

The  legal  basis  of  the  current  Directive  is  Article  114(1)  TFEU.  The  Directive 
implements  the  international  Green  Card  system  in  the  EU,  and  also,  by  going  beyond 
the  minimum  requirements  of  that  system,  achieves  free  movement  of  motor  vehicles 
between Member States.  

Subsidiarity: Necessity of EU Action  

The Directive protects victims of accidents in EU Member States other than that of their 
residence, and domestic victims of an accident caused by a driver from another Member 
State. The measures envisaged  can only  be enacted at EU level, as they  concern cross-
border  active  insurers,  cross-border  mobile  motor  insurance  policyholders  and  border 
insurance checks of vehicles.  
Compensation  of  victims  of  traffic  accidents  in  case  of  cross-border  insolvency  of  an 
insurer  is  paramount  to  the  smooth  functioning  of  the  single  market.  Uncoordinated 
action  by  means  of  a  patchwork  of  voluntary  frameworks  and  agreements  cannot 
guarantee  that  victims  are  duly  compensated  and  that  risks  are  equally  shared  among 
Member  States.    A  level  playing  field  across  all  Member  States  in  terms  of  minimum 
amounts of cover to ensure an equal minimum protection of victims of traffic accidents 
across the EU cannot be achieved by uncoordinated action. Addressing uninsured driving 
in  cases  of  cross-border  traffic  cannot  be  achieved  by  action  at  national  level.  Finally, 
ensuring  equal  treatment  of  claims  history  statements  by  insurers  for  prospective 
policyholders moving across borders cannot be achieved by uncoordinated action.   

Subsidiarity: Added value of EU Action  

The MID regulates cross-border use and cover of MTPL insurance, seeks to ensure the 
free  movement  of  persons  and  vehicles  across  borders  and  at  the  same  time  seeks  to 
ensure a comparable level of protection of victims of traffic accidents. Only action at EU 
level can ensure the protection of victims in case of cross-border accidents involving an 
insolvent  insurer.  Only EU  action  can  ensure  a uniform  application  of  the  scope  of  the 
Directive  and  enforce  the  insurance  obligation.  Furthermore,  only  EU  action  can  set 
harmonised  minimum  standards  of  protection  of  victims  when  moving  across  borders. 
Only EU action can ensure the harmonisation of claims history statements across the EU 
and  ensure  non-discriminatory  treatment  of  prospective  policyholders  moving  across 
borders.  

General and specific objectives 

Any initiative revising the MID should reinforce the general objectives of the MID which 
aim to ensure a high level of protection of victims of traffic accidents and ensure the free 
movement of persons and goods across the EU. These general objectives can be broken 
down into the following, more specific objectives:  

 
 
 
 
 
 
Problems 

Unequal  protection  of 
injured  parties  across 
Member  States  in  certain  circumstances  (e.g. 
insolvency of the insurer). 

Specific objectives 
Ensure  a high  level  of  protection  for  victims 
of  motor  vehicle  accidents  (even  in  case  of 
insolvency of the insurer) 

Differential  treatment  and  freeriding  behaviour 
negatively  affecting  policyholders,  especially  in  a 
cross-border context 

Ensure fair treatment of policyholders across 
the EU (in particular when changing Member 
State of residence). 

Consistency of the objectives with other EU policies 

The  Motor  Insurance  Directive  supports  the  main  objectives  of  the  internal  market,  in 
particular the free movement of persons and goods, which are fundamental freedoms of 
the  European  Union.    It  is  also  consistent  with  the  principles  of  the  internal  market 
ensuring the free provision of services and free establishment by insurers.  

The proposed changes to the current Directive are also consistent with the rules on data 
protection41 ensuring the appropriate collection and treatment of data for the purpose of 
law  enforcement,  permissible  within  the  framework  of  the  Directive.  A  further 
assessment of data protection can be found in Section 4.4 (under "option 2"). 

Consistency of the objectives with fundamental rights 

The  EU  is  committed  to  high  standards  of  protection  of  fundamental  rights  and  is 
signatory  to  a  broad  set  of  conventions  on  human  rights.  In  this  context,  the  proposed 
amendments are not likely to have a direct impact on these rights, as listed in the main 
United Nations conventions on human rights, the Charter of Fundamental Rights of the 
European  Union  which  is  an  integral  part  of  the  EU  Treaties,  and  the  European 
Convention on Human Rights ('ECHR'). 

WHAT  ARE  THE  POLICY  OPTIONS  AND  THEIR  IMPACTS  AND  HOW  DO 

THEY COMPARE?  

This section describes for each policy area, the available policy options, their impacts and 
compares the different options.  

41   Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data and on the free movement 
of such data, and repealing Directive 95/46/EC (OJ L 119, 4.5.2016, p. 1). 

23 

 
 
 
 
 
 
                                                            
What is the baseline scenario? 

Under the baseline scenario, no action is taken in any of the policy areas.  

Under the baseline, in a case of insolvency of an insurer, there would be no binding EU 
measure to guarantee the initial payment of the claim to the victim nor to determine the 
ultimate  responsibility  for  the  claim  in  case  of  insolvency  of  the  insurer,  both  for 
domestic insolvencies and for cross-border insolvencies or accidents with a cross-border 
dimension where the liable party has an insolvent insurer. This implies that victims have 
less protection in case of insolvency of the insurer as compared to accidents involving an 
uninsured driver or untraceable driver, which are covered by the compensation bodies set 
up  in  Article  10  of  the  Directive.    It  would  remain  determined  at  national  level  if 
insolvency  of  a  domestic  insurer  is  covered  by  a  guarantee  fund  or  not.  If  a  body  has 
been set up at national level, this will ensure initial and ultimate compensation of claims 
affecting  victims  in  case  of  insolvency  of  a  domestic  insurer,  possibly  with  levels  of 
compensation below the minimum amounts of the MID.  

For  cases  with  a  cross-border  element,  the  situation  described  in  Section  2.1.1.  would 
continue  to  apply.  For  such  cases,  the  existing  incomplete  patchwork  of  voluntary 
agreements (described in Annex 10) would apply.  As outlined in Section 2.1.1, in cases 
of insolvencies involving a Member State not signatory to the agreement, victims would 
continue  to  face  delays  in  payment  due  to  legal  proceedings,  or  claims  might  be 
reimbursed  at  lower  levels  (determined  at  national  level)  as  compared  to  the  minimum 
levels  of  covers  set  out  in  the  MID.  Furthermore,  as  a  consequence  of  the  baseline 
scenario, the body which carries out the initial compensation may find itself in financial 
difficulties, or contributions to a guarantee fund in the host Member State may need to be 
increased,  triggering  increases  in  premiums  for  all  policyholders  in  that  Member  State 
(this happened in Ireland after the Setanta failure and other cross-border failures).  

For  those  Member  States  that  are  not  signatories  to  the  agreements,  the  initial 
compensation and the ultimate responsibility for compensation may differ depending on 
the  guarantee  fund  to  which  a  cross-border  active  insurer  contributes.  This  in  turn 
depends  on  whether  a  host  Member  State  makes  use  of  its  right  under  article  189  of 
Solvency II to require a contribution to the national guarantee scheme.42 

Under  the  baseline  scenario  of  current  legislation,  minimum  amounts  of  cover  would 
continue  to  be  unequal  across  Member  States.  In  some  Member  States,  minimum 
amounts of cover for personal injury would be below €1 220 000 per victim or €6 070 
000 per claim and below €1 220 000 per claim for material damage (the amounts which 
apply  in  most  Member  States).  This  divergence  would  continue  to  exist  due  to  the 
transition  periods  that  some  Member  States  benefited  from.  Though  these  transition 
periods have ended they continue to affect the actual level of minimum amounts of cover 
which are consequently lower for a number of Member States (as the five-yearly revision 

42   Article 189 of Solvency II: "Host Member States may require non-life insurance undertakings to join 
and participate, on the same terms as non-life insurance undertakings authorised in their territories, in 
any scheme designed to guarantee the payment of insurance claims to insured persons and injured third 
parties." 

24 

 
 
                                                            
period only starts from the end of the transitional period, giving different revision dates 
in different Member States).  

In  addition  to  the  fact  that  the  adaptation  procedure  for  updating  minimum  amounts  to 
take into account inflation fails to set the same calendar to update minimum amounts in 
all Member States, it also lacks legal certainty. There is no legally binding act embodying 
the  revised  minimum  amounts,  making  it  difficult  to  enforce  the  new  amounts.  As  a 
consequence,  victims  in  different  Member  States  do  not  have  the  same  degree  of 
minimum protection envisaged by the Directive, as outlined in Section 2.1.2. This means 
that victims of accidents can have a different minimum level of protection depending on 
where the vehicle is normally based. 

Under the baseline scenario of current legislation, the minimum amounts of cover would 
continue to apply irrespective of the type of vehicle. Therefore, an accident caused by a 
vehicle with a capacity of four passenger places would have the same minimum amount 
as an accident caused by a bus with a capacity of 50 passenger places or an accident with 
a heavy truck of more than 7.5 tonnes. In some circumstances with accidents involving a 
high number of victims, or a high amount of material damage, the costs of claims could 
be  higher  than  the  regulatory  minimum  amounts  covered.  Some  Member  States  have 
acknowledged  this  by  setting  minimum  amounts  of  cover  have  higher  than  those  laid 
down in the Directive, thus providing for a higher level of protection.43 

Under  the  baseline  scenario,  detecting  uninsured  driving  deriving  from  cross-border 
traffic will remain difficult. This results from the prohibition within the Directive of all 
systematic insurance checks on borders. Under the baseline scenario, in accordance with 
article 4 of the Directive, Member States "may only carry out non-systematic checks on 
insurance provided that those checks are not discriminatory and are carried out as part 
of  a  control  which  is  not  aimed  exclusively  at  insurance  verification".  Domestically, 
away from national borders, systematic insurance checks remain possible but limited to 
vehicles registered in the Member State where the insurance checks are undertaken.  

As a positive consequence, the free movement of people goods and services within the 
EU  without  border  checks,  one  of  the  fundamental  freedoms  under  the  Treaty,  would 
continue to be ensured. Border checks or other systematic checks to verify whether the 
vehicle  has  MTPL  insurance  would  remain  prohibited.  However  as  a  negative 
consequence, uninsured driving of vehicles registered in another Member State, entering 
the territory of a Member State other than where they are normally based, would remain 
largely undetected.  

The  resulting  problem  of  uninsured  cross-border  traffic  is  aggravated  as  significant 
differences  in  the  levels  of  uninsured  driving  at  national  level  exist,  ranging  from  less 
than 1 percent of circulating vehicles  in some Member States to more than 7 percent in 
others  as  shown  in  confidential  Annex  9.  Therefore,  specifically  Member  States 
bordering  Member  States  with  high  levels  of  uninsured  driving  might  face  a  larger 

43   In particular in BE, FR, UK, IE the obligatory amounts of cover for personal injury have been set to 
unlimited to the benefit of policy victims. In one Member State (DE) the minimum amount of cover is 
set higher for vehicles with more than 10 passengers. 

25 

 
 
                                                            
number of accidents with uninsured drivers. This directly affects the cost of claims to be 
covered  by  guarantee  funds.  As  insurers  are  responsible  for  the  contributions  to  the 
guarantee  funds,  they  face  higher  costs  in  turn.  A  certain  proportion  of  these  costs  are 
passed on to policyholders, depending on the level of competition between insurers.  

Under  the  baseline  scenario,  Member  States  would  continue  to  lack  effective  tools  to 
detect uninsured drivers resulting from cross-border traffic. Under the baseline scenario, 
the cost of claims following accidents caused by uninsured vehicles, including in a cross-
border  context, would continue to place  a financial burden on Article 10 compensation 
bodies, passed on to all MTPL policyholders via a levy on MTPL policies. The current 
annual claims deriving from uninsured cross-border driving, estimated to lie in the range 
of EUR 835-870 million44, would continue to exist.  

Under  the  baseline  scenario,  no  action  is  taken  on  the  acceptance  of  claims  history 
statements  and  the  existing  obligation  of  the  Directive,  requiring  insurers  to  provide  a 
claims history  statement for the last 5 years to policyholders, continues to  apply.  Upon 
request  of  a  policyholder,  an  insurer  must  provide  claims  history  information  covering 
the last five years of the contractual relationship. However under the baseline scenario, 
there  is  no  harmonisation  of  such  statements  and  no  obligation  about  how  that 
information must be taken into account by a new motor insurer. Therefore, some citizens 
moving  across  borders  may  continue  to  face  difficulties  to  have  their  claims  history 
accepted by a new insurer in another Member State. This reluctance to take into account 
claims history from a foreign insurer could result from the absence of a common format 
of claims history statements, which may cause distrust of the authenticity of a statement 
by a new prospective insurer in another Member State. 

Furthermore,  the  existing  and  distinct  national  sytems  of  claims  history  statements  and 
no  claims  bonuses  would  continue  to  exist.  In  some  Member  States  there  are  specific 
rules on how to taken into account claims history when calculating premiums, while in 
other Member States this remains unregulated.  

Under the baseline, insurers could, on a voluntary basis, continue to make use of the very 
minimal  guidelines  (one-page)  on  claims  history  statements  from  Insurance  Europe,  an 
industry  assocation  of  insurers,  as  shown  in  Annex  6.  As  a  consequence,  under  the 
baseline, there is  no common uniform claims history statement that  insurers can  use  as 
part  of  the  assessment  to  calculate  premiums.  This  may  continue  to  raise  concerns  for 
insurers  as  regards  the  authenticity  of  statements  coming  from  a  insurer  in  another 
Member  State,  leading  to  reluctance  of  insurers  to  take  into  account  such  statements 
issued by a foreign insurer.  

Under the baseline, competitive market forces between insurers are not expected to solve 
the  problem,  as  the  market  segment  for  mobile  citizens  moving  across  borders  who 
require a new motor insurance will remain small as compared to national markets and not 
specifically  targeted  by  insurers.  According  to  Eurostat45,  in  2015,  a  little  under  11.3 

44   EREG, Topic Group XI on tackling uninsured driving, 8 April 2013 & Council of Bureaux estimates 

from 2011 

45   2016 Annual Report on intra-EU Labour Mobility 

26 

 
 
                                                            
million EU-28 citizens and 168,000 EFTA citizens of working age (20-64) were residing 
in  a  Member  State  other  than  their  country  of  citizenship,  totalling  some  11,434,000 
people.  In  2014,  1,692,000  working-age  nationals  immigrated  to  an  EU-28  Member 
State. This represents approximately 0.55% of the total working-age population living in 
the EU-2846 which is expected to remain relatively stable in the following years. It can be 
expected  that  only  working  age  nationals  moving  across  borders  would  require  a  new 
motor insurance in the new Member State in case they own a motor vehicle, which they 
are required to register and insure in the new Member State within six months. Although 
there is no data on the exact number of mobile citizens requiring a new motor insurance, 
it can be reasonably expected that only a fraction of the annual flow of mobile workers 
has a vehicle and would require a new motor insurance.  

Failure  to  take  the  claims  history  statement  from  a  foreign  insurer  into  account,  as 
compared to a domestic client, without a valid reason, is discriminatory. For EU citizens 
relocating across-borders, this could continue to unduly lead to higher premiums in so far 
as claims history remains an important factor to determine premiums by insurers in many 
Member States.  

Policy options addressing insolvency of the insurer 

1.Baseline scenario 

Under  the  baseline  scenario  no  action  is  taken  and  there  are  no  EU 
rules stipulating who is responsible for the initial payment of the victim 
or  the  ultimate  responsibility  for  the  claim.    Where  available  national 
rules  apply 
for  cross-border 
insolvencies  an 
incomplete  patchwork  of  voluntary  agreements 
applies.  

insolvencies,  and 

for  domestic 

2.  "Front  office  option": 
set  out  rules  on  initial 
compensation of victims 
in  case  of  insolvency  of 
an insurer. 

Under  this  option  Member  States  would  be  required  to  designate  a 
body  tasked  with  initial  compensation  of  the  victim  of  an  accident 
resident  on  their  territory  where  the  insurer  is  insolvent.  The  ultimate 
responsibility  for  the  claim  remains  undetermined  in  EU  legislation.  
This option is referred to as the "front office option".  

"Front  and  back-
3. 
office 
in 
option": 
addition  to  option  2,  set 
out  rules  on  ultimate 
responsibility  of  claims 
in  case  of  insolvency  of 
an insurer 

This  option  would  not  only  determine  responsibility  for  the  initial 
compensation of the victim but also the ultimate responsibility for the 
claim.  This  option  can  be  referred  to  as  a  "front  and  back  office" 
option. 

For  cases  of  insolvency  or  winding-up  of  an  insurer  a  distinction  should  be  made 
between: 

1) the body which takes care of the initial compensation of the victim (front office) and 
the  body  which  is  ultimately  responsible  for  the  payment  of  the  claim  (back  office). 

46   The  total  working-age  population  in  the  EU-28  in  2014  was  306,615,464,  according  to  Eurostat 

population figures 

27 

 
 
 
 
                                                            
While the scenarios as regards the "front office" vary depending on the residence of the 
liable driver and the victim, for the "back office "the key issue is to determine whether it 
is  the  home  or  host  Member  State  of  the  cross-border  insurer  which  bears  ultimate 
responsibility for compensation.  

2) accidents with a cross-border element and insolvencies with a cross-border element as 
outlined in Table 8 and 9 of Annex 7.  

Option 2: Front office option: require that Member States designate a body tasked with 
initial compensation of the victim of an accident, resident on their territory,  in 
cases where the insurer is insolvent.  

Description 

This  option  would  require  Member  States  to  designate  a  body  tasked  with  initial 
compensation of the victim of an accident, resident on their territory, where the insurer is 
insolvent  or  is  in  winding-up.  Member  States  could  designate  the  existing  motor 
guarantee  fund  set  up  to  meet  costs  arising  from  accidents  caused  by  uninsured  or 
untraceable vehicles (MID Article 10, compensation bodies) or a different body.  

To  ensure  an  even  protection  of  victims  throughout  the  EU,  this  option  would  cover 
accidents  involving  a  cross-border  insurer  and  also  cover  insolvency  of  a  domestic 
insurer irrespective of the residence of the driver or the victim.   

In  case  of  accidents  with  a  cross-border  dimension  involving  an  insolvent  insurer,  this 
option would require a body in the Member State of residence of the policyholder to pay 
the  initial  compensation.  However  this  option  would  leave  the  ultimate  financial 
responsibility  for  the  claim  (back-office)  unresolved  in  EU  legislation.  In  case  of 
accidents  with  a  cross-border  element,  this  would  mean  that  existing  voluntary 
agreements47 would be used where they are applicable.  

Consequences  

This option would ensure that throughout the EU, the initial compensation of a victim is 
guaranteed  in  case  of  insolvency  of  an  insurer,  both  for  accidents  with  a  cross-border 
element  and  for  purely  domestic  accidents.  Therefore,  in  cases  of  insolvency  of  an 
insurer,  both for domestic accidents and  accidents  with  a  cross-border element, victims 
would be protected in accordance with the requirements set out in the MID. This implies 
that the compensation would be undertaken by the body designated at national level and 
with  the  timeframe  and  minimum  amounts  of  cover  set  out  in  the  MID.  As  a 
consequence,  cases  of  insolvency  of  an  insurer  would  result  in  the  same  protection  of 
victims  as  compared  to  uninsured  or  untraceable  vehicles  currently  laid  down  by  the 
Directive. 

At domestic level, this would ensure  that in one Member State where there is currently 
no body designated to act in case of insolvency, such a body would be designated. For 

47   See Annexes 10 and 12. UK and IE withdrew from the CoB 1995 Agreement in 2016. 

28 

 
 
                                                            
other  Member  States  which  already  have  national  legislation  on  the  insolvency  of  a 
domestic insurer, this would imply that the minimum amounts of cover laid down in the 
MID would apply.  Compensation of the victim would be ensured in principle by a body 
in the Member State of residence of the victim of an accident (usually, but not always, 
the Member State where the accident takes place).   

However,  in  this  scenario  the  ultimate  responsibility  for  compensation  would  remain 
unresolved. If the two Member States concerned participate in a voluntary agreement, the 
rules of the voluntary agreement would apply. In the absence of an applicable voluntary 
agreement, it would be uncertain who would bear the ultimate cost of the claim, which 
may lead to court proceedings (as was the case in the failure of Setanta – see Box 3). In 
that  context  the  host  Member  State  already  has  the  power  provided  in  article  189  of 
Solvency II to impose contributions on the cross-border insurer.  

Assessment 

The mandatory creation of a "front office" to reimburse victims in case of an insolvent 
insurer would contribute to a high level of protection of victims in case of insolvency of 
an insurer in all EU Member States, both for domestic accidents and for accidents with a 
cross-border  element.  Victims  would  have  the  same  protection  as  compared  with 
accidents  involving  uninsured  or  untraced  vehicles,  which  are  already  covered  by  the 
Directive. 

Compared with the current patchwork of voluntary agreements, this would also enhance 
legal certainty for victims and ensure the same level of protection across the EU.  

As  the  ultimate  payment  of  the  claim  would  remain  unsettled,  this  option  would  still 
leave a key role for existing incomplete voluntary agreements in the event of accidents 
with a cross-border element. Therefore in cases where one or more Member States do not 
participate  in  such  an  agreement  it  would  remain  uncertain  whether  the  body  which 
carries out the initial compensation will ultimately obtain reimbursement from a body in 
the Member State where the insurer is established. If such reimbursement is not obtained, 
it can be expected that Member States would make use of their option under Article 189 
of  Solvency  II,  as  regards  motor  insurers  from  other  Member  States,  and  may  start 
requiring  contributions  from  insurers  which  provide  services  on  their  territory  to  cover 
the cost of potential initial compensations due to insolvency of the insurer. 

Option  3:  Front  and  back-office  option:  in  addition  to  option  2,  also  stipulate  the 
ultimate responsibility for compensation of the victim of a cross-border accident 
where the insurer is insolvent. 

Description 

This option would mandate the front- and back-office responsibility in case of insolvency 
of the insurer. It would include option 2 as regards the initial compensation of the victim 
(front  office)  which  should  be  undertaken  by  a  national  compensation  fund  or  another 
body of the Member State of residence of the victim. In addition, this option would also 
determine which Member State should bear ultimate financial responsibility for the claim 
(back office).  

29 

 
 
To  determine  the  ultimate  responsibility  for  the  claim  (back  office),  two  distinct 
approaches could be considered:  

  Sub-option A: Home Member State Approach  

Under  this  sub-option,  the  Directive  would  stipulate  that  the  body  that  bears  the  final 
responsibility  is  in  the Member  State  of  establishment  of  the  insurer  providing  policies 
on an freedom of services or freedom of establishment basis (Home Member State). The 
insurer would be required to contribute to the guarantee fund of the Home Member State 
in case of its potential insolvency. 

  Sub-option B: Host Member State Approach 

Under this sub-option, the Directive would oblige designation of a body in the Member 
State in which the insurer is providing services or has a branch (Host Member State). The 
insurer  would  logically  be  required  to  contribute  to  the  guarantee  fund  of  the  Host 
Member  State  in  case  of  its  potential  insolvency,  using  the  powers  in  article  189  of 
Solvency II.   

Consequences  

Under  this  option,  rules  would  clearly  set  out  responsibilities  for  both  initial 
compensation of claims and ultimate responsibility. Like option 2, option 3 would ensure 
a high level of protection of victims. Victims would have the same protection in cases of 
insolvency  of  an  insurer  as  compared  to  cases  of  accidents  involving  uninsured  or 
untraced vehicles, which are already covered by the Directive. 

In addition, this option would determine the allocation of the ultimate cost of claims in 
case  of  insolvency  of  an  insurer  operating  on  a  cross-border  basis.  This  option  would 
effectively replace the existing patchwork of voluntary agreements with limited territorial 
scope, with mandatory EU rules ensuring an EU-wide coverage. In comparison with the 
voluntary  agreements,  it  would  not allow  Member  States  to  unilaterally  withdraw from 
obligations,  negotiate  opt-outs  or  set  limitations on  the  timing  or  coverage  of  claims  at 
national level below the standards set at EU level. This option would replace the existing 
voluntary agreements and render them without object.  

Option  3  (front  and  back  office)  would  ensure  a  high  level  of  protection  of  victims.  
As  with  option  2,  in  all  EU  Member  States  there  would  be  a  body  mandated  with  the 
initial compensation of victims, both for domestic insolvencies and for insolvencies with 
a cross-border aspect.  

In addition, option 3 would determine the ultimate responsibility of the claim and would 
provide legal certainty. It would determine which body is ultimately responsible to bear 
the cost of claims for all possible scenarios outlined in table 8 and table  9 of Annex 7. 
Given the existing voluntary  agreements,  which  allocate responsibility to  a body in  the 
Home Member State, sub-option A would require fewer changes to current arrangements 
for many Member State which participate in such agreements.  It would require changes 
mainly for those Member States which are not signatories of the voluntary agreements or 
have retracted or have opt-outs or derogations.  

30 

 
 
Sub-option  A  (Option  3)  would  be  coherent  with  the  system  of  financial  supervision 
already  in  place  through  the  Solvency  II  Directive,  based  on  the  Home  Member  State 
principle.  48  It  would  also  incentivise  the  home  Member  State  authorities  to  carry  out 
strong prudential supervision, which is not necessarily currently the case if an insurer has 
little or no activity in its home Member State. 

Comparison of the attributes of the options: 

Option 

Option 1 
No Actions 

Option 2 
Set  out 
compensation of victims. 

rules  on 

initial 

Effectiveness 

Efficiency 

Compensation 
victim 

of 

Ultimate  Settlement 
of Claims 

Overall  cost  of  the 
system 

  Place 

of 

accident/residence 
of the victim 
  Determined 
voluntary 
agreements.  
  No EU wide scope 

by 

by 

  Determined 
voluntary 
agreements.  
  No EU wide scope 

  Possible 

litigation 

for initial payment 

  Possible 
for  

litigation 

  Residence  of 

the 

victim.  

  EU-wide scope 

by 

  Determined 
voluntary 
agreements.  
  No EU-wide scope 

  No 

litigation 
initial payment 

for 

  Possible 
for 
settlement 

litigation 
ultimate 

Option 3 
In addition to option 2 set out 
rules 
ultimate 
on 
compensation of victims. 

  Residence  of 

the 

victim.  

  EU-wide scope 

  Home 

Member 
States of the insurer 
or  Host  Member  
State 

  EU-wide scope 

  No 

litigation 
initial payment 
  No litigation for final 

for 

payment 

Under  the  baseline  scenario,  there  would  be  no  EU  rules  in  case  of  insolvency  of  an 
insurer.  Therefore  for  domestic  insolvencies,  existing  national  rules  in  all  but  one 
Member  State  would  continue  to  apply.  For  insolvency  cases  with  a  cross-border 
element,  the  current  patchwork  of  voluntary  agreements  would  continue  to  apply.  The 
voluntary  agreements  do  not  involve  all  EU  Member  States  and  do  not  require 
compensating victims in full, and therefore entail a lower level of protection compared to 
cases  of  accidents  for  uninsured  or  untraceable  vehicles  under  the  current  Directive. 
Member States can also withdraw at any time unilaterally from the voluntary agreements.  

Furthermore, in case of an accident involving a "visiting victim", it is more complicated 
and  burdensome  to  obtain  compensation  of  claims.  Visiting  victims  are  currently 
required to claim compensation from the compensation body of the Member State of the 
accident and not the Member State of their residence.  

48   This  principle  is  clearly  laid  down  in  Article  30  of  the  Directive:  "The  financial  supervision  of 
insurance  and  reinsurance  undertakings,  including  that  of  the  business  they  pursue  either  through 
branches or under the freedom to provide services, shall be the sole responsibility of the home Member 
State." 

31 

 
 
 
 
 
 
 
                                                            
In  the  absence  of  an  applicable  voluntary  agreement,  there  is  also  no  clarity  on  who  is 
ultimately  responsible  for  the  payment  of  the  claims,  which  opens  scope  for 
litigation/arbitration,  causing  delay  of  compensation.  Evidence49  shows  that  recent 
insolvency  cases  involved  also  Member  States  which  are  not  signatories  of  one  of  the 
voluntary agreements. Those cases also show that it can take several years for court cases 
to finally determine which body should ultimately compensate the victim50.  

Compared  to  the  baseline  scenario,  option  2  would  provide  for  a  higher  level  of  legal 
certainty and better protection of victims. In cases of insolvency of an insurer, for both 
domestic cases and cases with a cross-border element, this option would mandate that the 
compensation  body  of  the  residence  of  the  victim  must  pay  out  the  victim  in  the  first 
place  (front  office).  As  a  consequence  the  compensation  of  the  victim  would  be 
undertaken  within  a  define  timeframe  and  respect  the  minimum  amounts  of  cover  laid 
down  in  the  Directive.  In  some  cases,  this  would  mean  that  victims  would  be 
compensated with a higher amount in comparison with the baseline scenario, where the 
determined level of compensation by guarantee bodies is left to the Member States. 

Option 2 is coherent with the objective of the Directive to ensure a swift compensation of 
victims.  The  mandatory  determination  of  the  front  office  would  however  not  deal  with 
which  authority  is  ultimately  responsible  for  the  settlement  of  claims  and  possibly 
situated in  another Member  State. Therefore it would remain  unclear from which other 
body  the  front  office  compensating  body  can  obtain  recourse.  Furthermore,  in  the 
absence of defined rules on the body ultimately responsible for the final settlement of the 
claims, there would be room for litigation, generating additional costs and delays in the 
ultimate settlement of the insolvency case.  

Option  3  would  create  the  same  level  of  protection  of  victims  and  at  the  same  time 
achieve  a  higher  overall  level  of  legal  certainty  for  compensation  bodies.  This  option 
would not only determine the body which initially pays the claim, but also the body that 
would  ultimately  pay  for  the  claim  (front  office  and  back  office).  This  option  would 
ensure a smooth process to reimburse victims and settle the claim, leaving less scope for 
litigation  as  compared  to  option  2.  This  option  therefore  provides  for  a  more  coherent 
process for the compensation of claims in case of insolvency of the insurer as compared 
to option 2.  

Option 3 sub option A (the Home Member State principle) would be coherent with the 
financial  supervision  framework  in  Solvency  II  and  with  the  current  system  already  in 
place through the voluntary agreements of the CoB. Consequently, the required changes 
and  impact  of  the  implementation  of  this  approach  would  be  lower  as  compare  to  sub-
option B. Sub-option B (Host Member State responsibility) would require changes for a 
majority  of  Member  States,  and  would  also  stimulate  host  Member  States  to  use  their 
right under article 189 of Solvency II to require contributions from cross-border insurers 

49   See Annexes 8 and 10. UK and IE withdrew from the CoB 1995 Agreement in 2016. 

50   See section 2.1.1, for the example of the Setanta case.  

32 

 
 
                                                            
to  their  guarantee  fund,  which  could  deter  cross-border  activity  and  work  against  the 
single market. Therefore, Option 3 Sub-option A is the preferred option. 

EFFECTIVENESS 

Objective 1 
Ensure high 
level of 
protection for 
victims of motor 
vehicle 
accidents 

Objective 2 
Ensure fair 
treatment of 
policyholders 
across the EU 

EFFICIENCY 
(cost-effectiveness) 

Coherence 

Score 

 0 

n.a. 

0 

0 

0 

. 

Objectives 

Policy  
option  

Option 1 
No Action 

+ 

+ 

 n.a. 

Option 2 
Set  out  rules 
initial 
on 
compensation 
of victims. 
Option 3 
In addition to 
option  2  set 
out  rules  on 
ultimate 
compensation 
of victims. 
Magnitude of impact as compared with the baseline scenario (the baseline is indicated as 0): ++ strongly 
positive; + positive; – – strongly negative; – negative; ≈ marginal/neutral; ? uncertain; n.a. not applicable 

n.a. 

++ 

++ 

 5 

+ 

+ 

3 

Impact on stakeholders 

Victims 

Insurers 

0 

↑ 

↑ 

Option 1 
No policy change 

Option 2 
Set  out  rules  on  initial 
compensation 
of 
victims. 
Option 3 
In  addition  to  option  2 
set out rules on ultimate 
compensation 
of 
victims. 

0 

↑ 

↑↑ 

National 
compensation 
bodies 
0 

motor 

Policyholders 
of 
insurance 
0 

↑ 

↑↑ 

↑ 

↑↑ 

Magnitude of impact on stakeholder: ↑ positive, ↑↑ strongly positively,  ≈ marginal/ neutral, ↓ negative,  ↓↓ 
strongly negatively affects stakeholder. 

Options  2  and  option  3  are  equally  beneficial  for  victims  as  they  set  rules  on  initial 
compensation  beneficial  for  victims,  ensuring  a  swifter  compensation  of  the  victim. 
Furthermore,  by  determining  the  place  of  residence  as  the  location  where  victims  can 
submit  claims,  the  procedure  to  obtain  compensation  is  facilitated,  removing  potential 
language and other barriers.  

For insurers, national compensation bodies and policyholders of motor insurance, option 
3 is more beneficial than option 2 as it provides legal certainty on the initial and ultimate 
settlement  of  claims,  reducing  the  need  for  legal  proceedings.  Given  that  the  system 

33 

 
 
 
 
 
        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
already in place though voluntary agreements follows the Home Member State approach, 
the impact and required changes to implement the Home Member State approach across 
all  Member  States  (sub-option  A)  would  be  lower    as  compared  to  the  Host  Member 
State Approach (sub-option B). Therefore, sub-option A is the preferred option.  

Policy options to ensure that minimum amounts of cover are equal across the EU 

In  addition  to  the  baseline  scenario,  two  additional  options  to  determine  minimum 
amounts of cover are considered. A second option (after the baseline) sets the minimum 
amounts  equal  at  EU  level  from  now  on  at  the  highest  level  currently  applying  in  EU 
Member  States,  and  the  third  option  allows  for  extending  the  minimum  amounts  for 
accidents  with  vehicles  with  a  large  number  of  passengers  (e.g.  buses).  The  option  of 
maximum harmonisation of minimum amounts is not considered, as being detrimental to 
victim protection by requiring reductions of amounts of cover in certain Member States. 

1. Baseline scenario 

Existing diverging minimum amounts remain as they are and as a result 
of a former transition period, not all minimum amounts are the same in 
all  Member  States.  Process  and  timing  of  updating minimum  amounts 
remains a complex process.  

2. Harmonise 
minimum amounts, 
and amend the 
procedure and timing 
of the periodic revision 
of minimum amounts.  

3. 
Introduce  distinct 
minimum  amounts  for 
certain 
of 
vehicles 

types 

Harmonised dates for adaptation of minimum amounts and streamlining 
of  the  process  of  updating  minimum  amounts  ensuring  that  minimum 
amounts are the same at all times across all Member States. Member 
States  keep  the  flexibility  to  set  higher  minimum  amounts  at  national 
level.  

The minimum amount for personal transport vehicles could be left as at 
present  or  amended  upwards.  Certain  vehicles,  e.g.  buses,  heavy 
trucks, could have higher minimum amounts of cover.  

Options 2 and 3 can be combined.  

Option 2: Ensure that minimum amounts are equal across all Member States.  

Description 

This option would ensure that minimum amounts of cover are set at all times equal across 
all  Member  States,  ensuring  that  victims  benefit  from  the  same  minimum  standard  of 
protection in terms of compensation.  

In  comparison  with  the  baseline  scenario,  this  option  would  also  introduce  a  clearer 
adaptation method and timing for setting the minimum amounts of cover. It would set a 
uniform  calendar  and  clear  deadlines  for  adaptation  of  minimum  amounts  to  adjust  to 
inflation. This option would remove any remaining effects of transition periods. It would 
continue  to  allow  Member  States  to  set  higher  minimum  amounts  of  cover  at  national 
level if they consider it appropriate.  

Consequences  

34 

 
 
As  a  consequence  of  this  option,  the  minimum  amounts  of  cover  would  be  in  all  EU 
Member States at all time the same or higher than those prescribed in the Directive, with 
no more transitional periods or derogations for Member States. For personal injury, the 
minimum amounts of cover would be set, for all Member States, at the levels currently 
applying in Member States which had no transition period: €1 220 000 per victim or €6 
070 000 per claim, whatever the number of victims; and in the case of material damage, 
€1  220  000  per  claim,  whatever  the  number  of  victims51.  Minimum  amounts  would  be 
adapted  in  all  Member  States  at  the  same  time  every  5  years52  to  take  inflation  into 
account.  This  option  would  remove  any  remaining  effects  of  transitional  periods  that 
some Member States have benefitted from. Those Member States which benefited from 
transitional periods would have to increase their minimum amounts applicable53.  

Assessment  

Under this option the minimum protection of victims would be guaranteed at EU level by 
a common minimum standard set in the Directive, achieving the objective of ensuring a 
high level of protection across all Member States. Furthermore, this option would allow 
Member  States  to  determine  an  even  higher  level  of  protection  if  necessary  and 
appropriate, creating an even higher level of protection for their citizens.  

In  those  Member  States  where  the  minimum  amounts  are  currently  lower  than  the 
amounts  set  in  the  MID,  this  option  could  potentially  raise  the  premiums  of  MTPL 
insurance, as the amount covered by the insurance would need to be increased. However, 
as explained further in section 6 on macro-impacts, the minimum amounts of cover are 
only  one  factor  among  others  that  determine  insurance  premiums.  Minimum  amounts 
only  have  any  effect  in  very  severe  accidents.  Therefore  price  increases  for  MTPL 
premiums  should  be  limited.  The  benefits  of  uniform  minimum  protection  of  victims 
consequently outweigh the potential increase in motor premiums in some Member States. 
Moreover,  the  intention  of  the  legislator  in  the  current  directive  was  that  the  transition 
periods, and consequently the distinct minimum amounts would disappear over time; the 
fact that this is not the case seems to be due to drafting oversight rather than the will of 
the legislator.  

Option 3: Introduce distinct minimum amounts for certain types of vehicles.  

Description 

Accidents  with  certain  vehicles,  e.g.  buses,  coaches  or  heavy  trucks  may  have  the 
potential to injure a large number of persons or create more material damage. Therefore, 
under this option, a higher minimum amount of cover would be required for certain large 

51   These are the inflation-adjusted amounts currently applicable for those Member States which did not 

benefit from any transitional period. 

52   The adaptation period of five years is maintained as in the current Directive.  

53   Member States with a transition period are: BG, CZ, EE, EL, IT, LV, LT, MT, PL, PT, RO, SI, SK. 

None of those Member States currently apply an amount of cover in excess of the minima. 

35 

 
 
                                                            
vehicles. In particular certain vehicles, for example buses or coaches with more than 10 
places or  heavy trucks over 10 tonnes, would have higher minimum amounts of cover 
than the current levels.  For other personal transport vehicles minimum amounts would 
remain as at present.  

Consequences  

This option would provide for a higher level of protections of victims in case of accidents 
with certain types of vehicles such as buses, coaches and trucks if the total cost of claims 
would exceed the current minimum amounts of cover in the directive.  This is relevant in 
all Member States with the exception of those (BE, DE, DK, FI, IE, LU, SE, SK, UK) 
which  impose  minimum    amounts  well  above  the  levels  set  out  in  the  Directive  for  all 
types of vehicles.  

that 

However,  some  stakeholders  (insurers,  public authorities) in  some  Member  States  have 
highlighted 
increasing  minimum  amounts  of  cover  could  entail  negative 
consequences,  as  the  overall  level  of  premiums  of  MTPL  insurance  could  increase. 
Nevertheless, evidence from premiums in Member States with unlimited amount of cover 
for personal damage implies that this risk would not necessarily materialise. Furthermore, 
data  from  Insurance  Europe  on  premiums  across  Member  States  show  that  levels  of 
premiums  vary  not  only  because  of  different  minimum  amounts  of  cover,  but  due  to  a 
wider range of factors, and consequently minimum amounts of cover have possibly only 
a limited impact on MTPL premiums.  

If this option were chosen, further work would be needed to determine what would be the 
amount  to  cover for personal  injury and  material damage.  It should also be determined 
which types of vehicles would be subject to this provision.    

Assessment 

This option would contribute to the objective of protecting victims of accidents involving 
buses and heavy goods vehicles involving personal injury or material damage beyond the 
minimum amounts of cover currently laid down in the Directive. This could potentially 
be beneficial  in  all Member States with  the exception  of BE, DE,  DK, FI, IE, LU, SE, 
SK,  UK,  which  have  already  considerably  higher  minimum  amounts  of  cover  for  all 
types of vehicles. 

It could be reasonably expected that accidents involving buses or coaches or heavy goods 
vehicles have a higher level of risk or result in high levels of damage. A recent study54 
shows  that  the  cost  of  a  motor  accident  can  be  divided  into  casualty-related  costs 
(medical  costs,  production  loss,  human  costs  and  some  other  costs)  and  "crash related" 
costs (property damage, administrative costs and some other costs), As a consequence, a 
high cost of claims may depend on a number of factors which are aggravated in case of 

54     The cost of road accidents in the Netherlands, An assessment of scenarios for making new cost 

estimates, 2016, Study available at: 
https://trimis.ec.europa.eu/sites/default/files/project/documents/thecostofroadtrafficaccidentsinthenethe
rlands.pdf 

36 

 
 
                                                            
accidents with buses and coaches or heavy goods vehicles. In particular, accidents caused 
by buses often entail the risk of higher numbers of victims, as shown by the examples in 
section  2.1.2.  In  case  of  accidents  caused  by  heavy  goods  vehicles  such  as  lorries,  the 
cost of claims may be higher due to higher levels of material damage, and could include 
environmental damage.  

However,  a  majority  of  stakeholders  and  of  Member  States  were  opposed  to 
differentiating the minimum amounts of cover depending on the type of vehicle55. Their 
rationale is that the amount of damage to persons caused in an accident is not necessarily 
correlated  to  the  type  of  vehicle  which  causes  the  accident.  In  particular  a  regular 
personal  motor  vehicle  could  cause  an  accident  resulting  in  significant  numbers  of 
victims.  For  example  an  accident  of  a  car  colliding  with  a  bus  could  result  in  many 
personal injuries and significant material damage, the compensation of which would go 
well beyond the minimum amounts of cover; the personal car would be liable for this.  

Comparison of policy options 

Option  2  would  achieve  a  higher  level  of  protection  of  victims  than  the  baseline  as  it 
would set all minimum amounts of cover equal at all times across the EU, removing the 
existing difference of minimum amounts of cover, and requiring certain member States to 
increase their current minimum amounts.  

Option 3, which would increase minimum amounts for certain types of vehicles, would 
provide an even higher level of protection of victims, while the magnitude would depend 
on the design of the measure.  

This measure could also reduce the discrepancies in minimum amounts of cover between 
Member  States,  as  some  have  set  minimum  amounts  at  a  higher  level  for  all  types  of 
vehicles.  

On  the  downside,  this  option  could  increase  insurance  premiums  for  these  types  of 
vehicles  depending  on  the  actual  calibration  of  the  measure;  consequently,  this  could 
increase costs for transportation firms. For example, the minimum amounts of cover for 
buses  could  depend  on  the  capacity  of  passengers,  and  for  each  additional  passenger 
there  could  be  an  additional  EUR  1  Million  of  protection  for  personal  injury.  This 
compares  to a regular passenger vehicle  with a capacity up to  7 passengers covered by 
the current directive at EUR 6 Million.  

Both option 2 and 3 would be coherent with the objectives of the Directive to ensure free 
circulation of people and provide a high level of protection of victims.  

EFFECTIVENESS 

        Objectives 

.  Objective 1 

Objective 2 

Ensure high level 
of protection for 

Ensure fair 
treatment of 

EFFICIENCY 

(cost-
effectiveness) 

Coherence 

Score 

55   See Annex 2. 

37 

 
 
 
 
                                                            
Policy  
option  

Option 1 
No policy change 

victims of motor 
vehicle accidents 

policyholders 
across the EU 

 0 

0 

0 

0 

0 

Option 2 
Set minimum amounts equal 
Option 3 
Set  minimum  amounts  higher 
for certain vehicles.  
Magnitude of impact as compared with the baseline scenario (the baseline is indicated as 0): ++ strongly 
positive; + positive; – – strongly negative; – negative; ≈ marginal/neutral; ? uncertain; n.a. not applicable 

++ 

-/? 

+ 

+ 

+ 

+ 

+ 

+ 

3 

4 

Impact on stakeholders 

For victims of motor accidents both option 2 and option 3 are beneficial. The additional 
level of protection of victims under option 3 would depend on the actual calibration of 
the minimum amount. In Member States which already have higher minimum amounts 
of cover for all types of vehicles, there would be little or no change.   

For insurers and national compensation bodies, higher minimum amounts of cover would 
have  a  neutral  effect,  since  any  extra  costs  could  be  passed  on  to  policyholders  in  the 
form  of  increased  premiums.  However,  option  2  would  lead  to  limited  changes  in  the 
level  of  minimum  amounts  of  cover  (an  increase  of  maximum  21%,  see  annex  3),  and 
only  in  a  limited  set  of  Member  States.  Option  3  could  affect  insurance  premiums  for 
buses,  coaches  or  heavy  goods  vehicles  as  insurers  would  need  to  provide  for  higher 
cover in case of accidents with these vehicles. However, evidence from Member States 
with  higher  minimum  amounts  show  that  increases  would  be  low/moderate,  as  the 
frequency  of  occurrence  of  these  types  of  accidents  is  low.  Furthermore,  the  price  of 
premiums depends on multiple factors as outlined in section 5.2.  

For  policyholders  of  motor  insurance,  both  options  2  and  3  could  affect  the  level  of 
premiums at national level to some extent in some Member States. As option 2 consists 
of an alignment of Member States to the current higher minimum amount for all types of 
vehicles, provided for in the directive, the increase in minimum amounts is limited (see 
section 5.2). Consequently, the expected increases  in  premiums for policyholders of all 
types of vehicles would be limited.  

Option 3 would most likely affect MTPL premiums for coaches buses and heavy goods 
vehicles, as the cover would increase. The actual impact of option 3 on premiums would 
depend on the calibration of the measure for these vehicles. MTPL premiums for regular 
motor vehicles would remain unchanged.  

Victims 

Insurers 

National 
compensation 
bodies 

Policyholders 
of 
insurance 

motor 

Option 1 
No policy change 

Option 2 
Set 

minimum 

0 

↑  

0 

↓  

0 

↓ 

0 

↓ 

38 

 
 
 
 
 
 
 
 
 
amounts equal 

Option 3 
Set 
amounts 
for 
vehicles.  

minimum 
higher 
certain 

↑↑  

↓↓  

 ↓↓ 

↓↓ 

Magnitude of impact on stakeholder: ↑ positive, ↑↑ strongly positively,  ≈ marginal/ neutral, ↓ negative,  ↓↓ 
strongly negatively affects stakeholder. 

During the consultation, there was broad support for option 2 from all stakeholder groups 
including  consumer  associations,  insurers  and  public  authorities,  on  the  grounds  that 
minimum protection of victims of motor accidents should be the same across the EU.   

As  regards  option  3,  consumer  associations  favoured  a  general  increase  of  minimum 
amounts (instead of a differentiated approach for certain vehicles), but only if this would 
not lead to increases in premiums. Insurers in general considered that there was no need 
to  make  a  distinction  between  types  of  vehicles  as  there  is  no  direct  link  between  the 
vehicle  responsible  for  the  accident  and  the  size  of  resulting  claims.  Public  authorities 
have  differing positions:  most  do not  seem to  favour a differentiation between types  of 
vehicles as proposed in option 3. Some Member States with higher minimum amounts of 
cover would favour an overall increase of the minimum amount of cover (which would 
affect other member States only). A few Member States have highlighted concerns about 
the probability of increases in premiums if minimum amounts were to increase.  

Option 2 is the preferred option as it ensures equal minimum protection of victims across 
the EU and at the same time the impact on premiums would be limited. Furthermore it 
has  the  broadest  stakeholder  support.  Furthermore,  option  2  provides  flexibility  to 
Member  States  to  set  higher  minimum  amounts  of  cover  if  they  would  consider  it 
necessary  for  accidents  with  claims  above  the  minimum  amounts  currently  foreseen  in 
the Directive.  

The impact of option 3 on MTPL premiums would depend on the actual calibration of the 
measure.  It  could  well  result  in  increased  premiums  for  policyholders  (bus  coach  and 
freight transport companies), passed on to their customers. It is uncertain if the increase 
in premiums would outweigh the benefits in terms of increased protection of victims of 
accidents caused by such vehicles. Member States are in any case allowed to set higher 
minimum  amounts  of  cover  for  certain  types  of  vehicles  such  as  buses  and  coaches  or 
heavy goods vehicles if they consider it necessary. 

Policy options addressing uninsured driving 

In general, uninsured driving remains a problem that should be addressed both at national 
level  and  at  EU  level.  Only  if  uninsured  driving  is  tackled  at  all  levels  can  there  be  a 
tangible reduction of uninsured driving across the EU. Therefore, in accordance with the 
principle  of  subsidiarity,  Member  States  should  take  all  necessary  steps  to  combat 
uninsured driving with the available tools at national level.  

To  complement  actions  to  combat  uninsured  driving  at  national  level,  this  section 
presents three options to address the problem of uninsured driving deriving from cross-

39 

 
 
border  traffic.  The  first  option  is  the  continuation  of  the  current  situation  (baseline 
scenario),  in  which  all  border  checks  of  insurance  are  prohibited  (by  article  4  of  the 
Directive). The second option would allow unobtrusive checks on insurance (those which 
can be carried out without stopping the vehicle) and the third option would mandate such 
unobtrusive checks.  

Theoretically  a  fourth  approach  would  be  possible.  This  would  consist  of  allowing  for 
obstructive  checks  on  insurance  for  traffic  crossing  borders,  including  stopping  the 
vehicle.  However,  this  approach  would  allow  reintroducing  time-consuming  border 
checks  to  verify  the  validity  of  motor  insurance  of  all  vehicles  crossing  borders.    This 
would  be  a  violation  of  the  freedom  of  movement  of  persons  and  goods,  fundamental 
freedoms  enshrined  in  the  Treaties,  and  at  the  same  time  undermine  the  functioning  of 
the Schengen system. Consequently, this option is discarded and is not further analysed.  

1. Baseline scenario 

No  change  to  the  Directive:  checks  of  insurance  of  vehicles  normally 
based in another Member State are not allowed.  

2. Allow unobtrusive 
checks of insurance 

Allow  Member  States  to  carry  out  checks  of  insurance  of  vehicles 
normally based in another Member State which do not require stopping 
of the vehicle (using number plate recognition technology for example).  

3.Mandate unobtrusive 
check of insurance 

Mandate  Member  States  to  carry  out  checks  of  insurance  of  vehicles 
entering  their  territory  which  do  not  require  stopping  of  the  vehicle 
(using number plate recognition technology for example). 

Option 2: Allow unobtrusive checks of insurance 

Description 

Under  this  option,  Member  States  would  be  allowed  (but  not  obliged)  to  carry  out 
systematic  checks  of  insurance  of  vehicles  on  their  territory  provided  that  they  do  not 
require stopping of the vehicle.  

This  would  allow  for  example  using  number  plate  recognition  technology  to  scan 
vehicles  entering  the  territory  of  a  Member  State.  This  data  could  be  compared  with 
national  databases  of  motor  insurance  policies  which  Member  States  have  to  set  up  in 
accordance  with  article  23(1)  of  the  Directive.    For  cross-border  traffic,  in  order  to 
achieve  effective  checks  for  motor  insurance,  an  exchange  of  information  between 
Member  States  would  be  necessary.  Unobtrusive  checks  would  verify  if  a  vehicle 
normally based in another Member State entering their territory is duly insured. As this 
option  would  allow  the  exchange  of  personal  information  between  Member  States  on 
number  plates  and  motor  insurance  held  by  individuals,  the  provision  must  be  in 
compliance with the applicable EU rules on data protection56.  

56   This would not need to be specified in the body of the MID, but could be recalled in a recital or in the 

Explanatory Memorandum. 

40 

 
 
 
                                                            
Consequences  

Member  States  would  be  allowed  to  set  up  unobtrusive  checks,  allowing  better 
enforcement of the insurance obligation and potentially resulting in greater detection of 
uninsured vehicles entering the territory of a Member State. Consequently, there could be 
fewer  victims  of  motor  accidents  involving  an  uninsured  vehicle  registered  in  another 
Member State.  Therefore victims could have  less need  to  apply for compensation  from 
the compensation bodies provided for in article 10 of the Directive.  

It could also be expected that the annual amount of claims deriving from uninsured cross-
border traffic, currently estimated at €870 Million57, would be reduced. For insurers, this 
would imply  a  reduction in  annual contributions to  be paid to  compensation bodies for 
accidents involving uninsured vehicles. For compensation bodies, this option could result 
in a reduction of claims to be handled. 

For  enforcement  authorities  this  option  could  entail  costs  to  set  up  checks  and  to 
exchange  information  on  car  registration  data  and  insurance  data  on  a  bilateral  basis. 
Enforcement authorities would presumably compare the costs of setting up unobtrusive 
checks  and  exchange  of  information  on  their  territory  with  the  benefits  in  terms  of 
reduction of uninsured driving and claims on compensation funds. Only Member States 
which  face  particular  problems  of  uninsured  driving  involving  vehicles  registered  in 
another Member State could be expected to put in place such checks, and due to cost of 
infrastructure, probably on main roads only.  

Assessment 

This option would provide Member States an extra tool to address uninsured driving for 
cross-border  traffic.  This  option  strikes  a  balance  between  citizens’  freedom  of 
movement  enshrined  in  the  Treaty  and  the  enforcement  of  the  MTPL  insurance 
obligation outlined in article 3 of the Directive.  It would require amendment of article 4 
of  the  Directive.  Furthermore,  this  option  builds  on  existing  data  on  registration  of 
vehicles and registration of motor insurance policies which Member States must collect 
in accordance with article 23(1) of the Directive and which are preserved for a period of 
seven years after termination of the registration of the vehicle or the termination of the 
insurance contract. 

This option would allow Member States which face a particular problem with uninsured 
driving due to cross-border traffic to set up checks and exchange information with other 
Member States.  However, as shown in confidential Annex 9, not all Member States face 
the  same  levels  of  uninsured  driving  due  to  cross-border  traffic.  Therefore  this  option 
provides flexibility for Member States to set up unobtrusive checks to the extent that they 
consider  it  necessary.  For  example,  they  could  limit  costs  by  limiting  the  scope  of 
unobtrusive checks to the most important roads or by exchanging information only with 
bordering  Member  States  or  with  those  Member  States  where  they  have  identified  a 
particular problem due to uninsured driving.   

57   EREG,  Topic  Group  XI  on 

tackling  uninsured  driving,  8  April  2013,  https://www.ereg-

association.eu/media/1120/final-report-ereg-topic-group-xi-tackling-uninsured-driving.pdf 

41 

 
 
                                                            
Finally this option has the potential to reduce claims on compensation funds to reimburse 
victims  of  accidents  involving  an  insured  driver  with  a  vehicle  from  another  Member 
State.  As  a  consequence,  insurers  may  benefit  from  a  reduction  in  contributions  to 
compensation  funds.  Furthermore  the  number  of  policyholders  in  Member  States  could 
increase, helping to reduce premiums. The exact outcome for insurers and compensation 
funds will depend on the effectiveness of the unobtrusive checks and the impact on levels 
of uninsured driving.  

Assessment of data protection considerations 

The  processing  of  personal  data  provided  by  this  option  is  necessary  for  attaining  the 
legitimate  aims  pursued  by  the  Motor  Insurance  Directive,  which  are  to  ensure  a  high 
level of protection of victims of road accidents and at the same time allow for  the free 
movement  of  people  within  the  Union.  The  Directive  currently  imposes  an  insurance 
obligation on every motor vehicle and the level of uninsured driving in Member States is 
an  indicator  of  its  effectiveness.  Ensuring  compliance  with  the  motor  insurance 
obligation for vehicles travelling across borders should go hand-in-hand with respect for 
fundamental rights, in particular the right to respect for privacy and for the protection of 
personal  data.  The  data  collected  under  this  option  is  necessary  to  identify  if  a  vehicle 
complies  with  the  insurance  obligation  and  is  to  be  considered  personal  data. 
Consequently  the  General  Data  Protection  Regulation58  should  apply  to  the  processing 
activities carried out in application of this option.  

Option 3: Mandate unobtrusive checks of insurance 

Description 

Under this option, Member States would be mandated to carry out systematic checks of 
insurance of vehicles on their territory which do not require stopping of the vehicle. This 
would require all Member States to conduct such systematic checks and set up a system 
to  exchange  information  with  each  other  to  verify  if  a  vehicle  detected  entering  a 
Member State is in a database of motor insurance policies of the Member State where it 
is  registered.  As  in  option  2,  the  exchange  of  personal  information  between  Member 
States on number plates and motor insurance held by individuals, must be in compliance 
with the applicable EU rules on data protection59.  

Consequences  

Independently  of  the  level  of  uninsured  driving  due  to  cross-border  traffic,  this  option 
would  require  all  Member  States  to  set  up  unobtrusive  insurance  checks  and  exchange 

58  Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data and on the free movement 
of such data, and repealing Directive 95/46/EC (OJ L 119, 4.5.2016, p. 1). 

59   This would not need to be specified in the body of the MID, but could be recalled in a recital or in the 

Explanatory Memorandum. 

42 

 
 
                                                            
information with all other EU Member States.  Therefore, as compared to option 2 this 
option has a high potential to identify uninsured driving.  

On  the  downside,  as  compared  to  option  2, this  option  would  create  far  more  costs for 
Member States as they would be required to set up such a system to conduct checks and 
exchange  information  with  all  other  Member  States.    The  obligation  to  conduct  checks 
could be limited to main border entry points, or be extended to all border crossing points 
(this  would  be  very  expensive,  as  cameras  would  need  to  be  installed  on  every  road 
which crosses a border). A system would need to be set up even if in a given Member 
State, there is no particular problem with uninsured vehicles from other Member States. 
In addition, all Member States would need to set up a system to exchange information. A 
possible solution could be to set up a common European database for all the exchange of 
information on uninsured driving across all Member States.  

For insurers and compensation funds this option could be expected to reduce uninsured 
driving and lower claims on compensation funds and thus contributions for insurers. The 
actual  savings  would  depend  on  the  reduction  in  levels  of  uninsured  driving,  which 
remains  uncertain.  Nevertheless,  it  can  be  expected  that  the  reduction  in  levels  of 
uninsured driving  would be higher than with  option 2, as unobtrusive checks would be 
mandated across the EU.  

Assessment 

As  this  option  mandates  unobtrusive  checks  in  all  Member  States,  it  has  the  highest 
potential  to  reduce  uninsured  driving,  benefitting  compensation  funds  and  insurers 
(which would see a reduction in contributions). In a competitive market, a reduction in 
contributions  could  eventually  lower  prices  for  policyholders,  especially  in  those 
Member  States  in  which  the  rate  of  uninsured  driving  is  currently  high.  The  actual 
outcome for compensation funds, insurers and policyholders would depend of the level of 
reduction in uninsured driving.  

Victims  of  motor  accidents  would  also  benefit  from  fewer  accidents  involving  an 
uninsured vehicle, even if the level of compensation would remain unchanged. Victims 
would be compensated directly by an insurer and not by a compensation fund, as in the 
case of an uninsured vehicle.  

On the downside, this option would also result in the highest costs for Member States, as 
they would be required to set up a system to conduct unobtrusive checks and exchange 
information with all other Member States on vehicle registration and motor insurance.  

As  there  are  very  uneven  levels  of uninsured  driving  across  the  EU,  for  some  Member 
States  it  might  not  be  cost-effective  to  set  up  such  a  system  and  exchange  information 
with another Member State with very limited cross-border traffic.  

Comparison of policy options 

Under  the  baseline  scenario,  all  systematic  border  MTPL  insurance  checks  would 
continue to be prohibited, making it difficult to detect uninsured driving involving cross-
border traffic.  Victims of accidents caused by an uninsured vehicle (normally based in 

43 

 
 
another  Member  State)  would  continue 
to  require  compensation  by  national 
compensation  funds.  Insurers'  contributions  to  compensation  funds  to  address  claims 
deriving  from  accidents  resulting  from  cross-border  uninsured  traffic  would  remain 
unchanged, and consequently, so would premiums of MTPL insurance for policyholders.  

Compared to the baseline, option 2 would provide tools to Member States to better detect 
uninsured driving and enforce the insurance obligation for cross-border traffic.  Reducing 
uninsured driving would contribute to a wider coverage of vehicles by MTPL insurance, 
lowering the risk of an accident involving an uninsured driver. This could lower claims 
on compensation bodies and lower contributions from insurers to  guarantee funds. In  a 
competitive market this could eventually lower premiums for policyholders.  

However, setting up unobtrusive checks and exchanging information with other Member 
States would involve costs.  In comparison with option 3, this option provides flexibility 
for Member States,  limiting  the potential costs. Member States  would be free to  set up 
checks based on their needs to address uninsured driving. They could also control costs 
by limiting unobtrusive checks to certain roads and/or limiting exchange of information 
to specific Member States. This is relevant, as the level of uninsured driving is not equal 
across all Member States.   

Therefore, option 2 is more cost-effective compared to option 3, which would mandate 
insurance  checks  and  require  exchange  of  information  between  all  Member  States, 
creating costs for all Member States.  

Option  3,  by  mandating  unobtrusive  checks  in  all  Member  States,  would  have  higher 
potential  to  reduce  uninsured  driving  as  compared  to  option  2,  and  therefore  higher 
potential  to  reduce  claims  on  compensation  funds,  contributions  from  insurers  and 
premiums  for  policyholders.  Nevertheless,  the  costs  might  outweigh  benefits  in  many 
Member States, as levels of uninsured driving are unequal across the EU.  

Therefore option 2 is the preferred option. 

Objectives 

policy 

Policy  
option  
Option 1 
No 
change 
Option 2 
Allow 
obstructive 
motor  insurance 
checks. 
Option 3 
Mandate  Non-
obstructive 
motor  insurance 

Non-

EFFECTIVENESS 

  Objective 1 

Objective 2 

Ensure high level of 
protection for victims of 
motor vehicle accidents 

Ensure fair treatment 
of policyholders across 
the EU 

EFFICIENCY 

(cost-
effectiveness) 

COHERENCE 

SCORE 

 0 

+ 

+ 

0. 

+ 

+. 

44 

0 

+ 

- 

0 

+ 

- 

0 

4 

2 

 
 
 
 
        
 
 
 
 
 
 
 
checks. 

Magnitude of impact as compared with the baseline scenario (the baseline is indicated as 0): ++ strongly 
positive; + positive; – – strongly negative; – negative; ≈ marginal/neutral; ? uncertain; n.a. not applicable 

Impact on stakeholders 

Victims 

Insurers 

National 
Compensation 
bodies 

Public 
authorities 

Policyholders 
of 
motor 
insurance 

0 

↑ 

0 

↑ 

0 

≈ 

0 

↑ 

0 

↑ 

Option 1 
No 
change 

policy 

non-

Option 2 
Allow 
obstructive 
motor 
insurance 
checks. 

↑ 

↑ 

↑ 

Option 3 
Mandate  non-
obstructive 
motor 
insurance 
checks. 
Magnitude of impact on stakeholder: ↑ positive, ↑↑ strongly positively,  ≈ marginal/ neutral, ↓ negative,  ↓↓ 
strongly negatively affects stakeholder. 

↓ 

↑ 

Option 2 has the potential to be beneficial for all the major  stakeholders if unobtrusive 
insurance  checks  are  effectively  conducted  only  where  needed.  However  the  actual 
impact  would  depend  on  the  reduction  of  uninsured  driving  due  to  the  unobtrusive 
checks.  Victims  would  face  fewer  accidents  with  uninsured  drivers,  national 
compensation  bodies  would  have  fewer  claims  due  to  uninsured  driving,  and  insurers 
would have lower contributions to compensation funds. Policyholders of motor insurance 
may  benefit  indirectly  if  in  a  competitive  market,  lower  contributions  from  insurers 
would lead to lower levels of premiums. 

For Member States the impact of option 2 depends on the actions they consider necessary 
to undertake unobtrusive insurance checks as such checks are not mandated but carried 
out  on  a  voluntary  basis.  Therefore  Member  States  can  determine  if  the    benefits  of 
conducting  unobtrusive  insurance  checks  outweigh  the  costs  of  setting  up  checks  and 
information  with  other  Member  States.  However  costs  would  be 
exchanging 
proportionate,  as  Member  States  can  calibrate  the  checks  and  limit  the  exchange  of 
information to certain other Member States, for example bordering Member States.     

Option  3  would  create  at  least  the  same  and  possibly  higher  benefits  as  option  2  for 
victims,  national  compensation  bodies  and  insurers  as  unobtrusive  checks  would  be 
conducted throughout the EU. The actual benefit would also depend on the reduction in 
uninsured  driving.  However,  option  3  would  result  in  much  higher  costs  for  Member 
States  as  it  would  mandate  setting  up  systematic  unobtrusive  checks  and  exchange  of 
information with all Member States. Nevertheless, there could be some efficiency gains 

45 

 
 
 
if  a  common  platform  were  established  for  the  exchange  of  information  on  uninsured 
driving.  

Policy options addressing the acceptance of claims history 

Policy options regarding the acceptance of claims history are the following: 

1. Baseline scenario 

No action is taken. There is no harmonisation of the content and format 
of claims history statements and no requirement on how claims history 
should be treated by insurers.  

2.  Recommendation 
on  the  acceptance  of 
history 
claims 
statements 

Recommendation to Member States to develop a harmonised template 
of claims history statements and ensure that claims history statements 
are  treated  the  same  for  domestic  and  cross-border  applicants  for  a 
MTPL insurance.    

3.  Harmonising 
the 
template  and  content 
of a claims statements, 

Under this option, format and content of claims history statement would 
be  harmonised  making  exchange  of  information  easier  for  insurers  in 
cross-border cases. 

4. Impose a non-
discrimination 
requirement for the 
treatment of claims 
history statements and 
a disclosure 
requirement  

In  addition  to  option  3  insurers  are  obliged  to  treat  claims  history  the 
same  for  domestic  and  cross-border  applicants  of  a  MTPL  insurance. 
Furthermore, insurers would be required to disclose how claims history 
is taken into account for the purpose of calculating premiums. 

During  the  public  consultation  the  possibility  to  extend  the  reference  period  for  claims 
history  statements  beyond  the  5  years  currently  laid  down  in  the  Directive  was  also 
explored. However, this option did not receive stakeholder support and was discarded. 

Option 2: Recommendation to Member States on claims history statements.  

Description 

Under this option, the Commission would adopt a recommendation directed to Member 
States on the treatment of claims history statements by insurers, recommending them to 
harmonise claims history statements to facilitate their authentication and to ensure easier 
acceptance of claims history statements for citizens moving across borders. Furthermore, 
it would be recommended to Member States to ensure that claims history statements are 
treated  the  same  for  domestic  and  cross-border  applicants  for  a  MTPL  insurance.  In 
addition,  it  would  be  recommended  to  Member  States  to  ensure  that  insurers  are 
transparent on how claims history statements are taken into account in the calculation of 
premiums.  

Consequences  

As a consequence of this recommendation, Member States could adopt most "guidance" 
to  the  insurance  industry  to  outline  the  content  and  format  of  claims  history  statement. 
Member States could also require that claims history statements are treated the same for 

46 

 
 
 
 
 
domestic and cross-border applicants of a MTPL insurance, and lay down a transparency 
requirement on how claims history statements are taken into account in the calculation of 
premiums. However, as there is no legal obligation for Member States to act, there is no 
guarantee of that all Member States would adopt such measures.  

Assessment  

This  option  may  result  in  no  action  or  uncoordinated  action  by  EU  Member  State  as 
regards  the  format  of  claims  history  statements  and  disclosure  requirements  on  how 
claims history statements are taken into account. Given this, it can be expected that there 
would remain differences in the content and format of claims history statements, making 
it  difficult  for  insurers  to  authenticate  claims  history  statements  resulting  in  continuing 
reluctance  of  insurers  to  take  into  account  claims  history  statements  issued  by  foreign 
insurers.  

Furthermore, there would most likely remain lack of transparency on how claims history 
statements  are  taken  into  account  by  insurers.  This  will  result  from  lack  of  mandatory 
transparency requirements, which will most likely remain voluntary. This would make it 
difficult for supervisors to enforce non-discrimination of claims history statements based 
on previous residence in another Member States. Also consumers will continue to have 
difficulties to verify how claims history is taken into account by the prospective insurer.  

Option 3: Harmonise the template and content of claims history statements  

Description 

Under  this  option,  the  template  of  the  statement  including  its  content  would  be 
harmonised. This information could include: the name, registration number and  contact 
details  of  the  insurance  company  establishing  the  declaration,  date  of  issue  of  the 
declaration,  identification  of  the  policyholder,  the  address  of  the  policyholder,  date  of 
birth  of  the  policyholder,  date  of  inception  and  date  of  expiry  of  cover  (period  of 
insurance), number of declared claims (liable and non-liable) during the past five years of 
cover  (or  at  least  during  the  period  of  insurance),  the  type  of  claims  and  dates  of  the 
accidents.  The  reference  period  for  claims  history  statements  would  remain  a  5  year 
period60.  However,  just  as  in  the  baseline  scenario,  there  would  be  no  prescriptive 
obligation on how the claims history statement should be taken into account by insurers 
and existing national systems of calculating no-claims bonuses would continue to exist.   

Consequences  

The format and content of claims history statements would be the same for all insurers 
within  the  EU.  Therefore  it  would  be  easier  to  compare  claims  history  statements  of 
policyholders  issued  by  insurers  of  another  Member  State.  This  would  allow  for  easier 
validation of the authenticity of claims history statements by insurers. For policyholders 
changing  residence  to  a  new  Member  State,  the  standardised  claims  history  statement 

60   There is no strong pressure from stakeholders to lengthen this period, and some Member States only 

require insurers to keep this data for limited periods, as little as 7 years in one Member State. 

47 

 
 
 
                                                            
should  be  more  easily  accepted  by  a  new  insurance  undertaking.  Consequently  they 
would have better chances of benefiting from the same treatment as domestic consumers, 
reducing the risk of discrimination based on their previous residence in another Member 
State. However, it would remain very difficult for policyholders to assess how the claims 
history statement is taken into account by an insurer when determining premiums. Also 
for  supervisors  it  would  remain  difficult  to  ensure  equal  treatment  of  policyholders  by 
insurers as there would be no transparency on the use of the claims history statement by 
the insurer.  

This  option  would  create  some  limited  initial  compliance  costs  for  insurers  in  order  to 
adapt their systems to the new format of claims history statement. However, there would 
be no material change as regards the data itself contained in the claims history statement, 
which is already obligatory.   

Assessment  

This option would contribute to the equal treatment of policyholders when moving across 
borders, as it would facilitate the verification of authenticity of claims history statements 
originating  from  insurers  based  in  other  Member  States.  The  harmonisation  of  the 
template of claims history statement is supported by all consumer organisations in their 
responses to the public consultation. One consumer organisation, BEUC61, would favour 
a more far-reaching intervention. In comparison with the brief voluntary code of conduct 
which  has  been  published  by  Insurance  Europe62,  claims  history  statements  from  any 
insurer  within  the  EU  would  be  more  easily  comparable.  Therefore,  insurers  would  be 
more familiar with claims history statements issued by foreign insurers for policyholders 
moving across borders.  

However, there is no complete guarantee that this option would sufficiently improve the 
situation  of  prospective  policyholders  moving  across  borders.  In  the  absence  of 
transparency  on  how  claims  history  statements  are  taken  into  account  by  insurers  to 
determine premiums it would remain difficult to verify by prospective policyholders (or 
by  supervisors)  whether  their  information  on  claims  history  was  effectively  taken  into 
account in calculating the proposed premium. 

Option  4:  Impose  a  non-discrimination  requirement  for  the  treatment  of  claims  history 
statements and a transparency requirement on the use of such statements  

Description 

In  addition  to  option  3,  this  option  would  also  introduce  a  non-discrimination 
requirement, explicitly stating that claims history statements should be treated equally for 
all potential policyholders requesting a policy. However, this option would, just as in the 
baseline scenario, not in itself prescribe how the claims history statement should be used 
to calculate premiums. It would only ensure that domestic residents and people moving 

61   BEUC contribution to the public consultation on the review of the Motor Insurance Directive.  

62   See Annex 6. 

48 

 
 
                                                            
across borders are treated the same way as regards the information on claims history for 
the purpose of determining a motor insurance premium. Insurers could continue to take 
into account other risk factors when calculating premiums. This would also leave insurers 
free to disregard claims history statements (for all potential customers), for example. 

To ensure effective enforcement of this provision, there should be sufficient transparency 
on  how  claims  history  statements  are  taken  into  account  by  insurers.  Therefore,  this 
option would entail a requirement for insurers to disclose how such statements are taken 
into  account  to  determine  a  premium  for  an  MTPL  policy.  This  would  allow 
policyholders and supervisors to see how claims history information is taken into account 
when  calculating  premiums,  and  determine  if  there is  discrimination  based  on  previous 
residence. 

Consequences 

As  a  consequence  of  this  provision,  in  addition  to  the  harmonised  template  on  claims 
history outlined in option 3, there would be equal treatment of policyholders as regards 
the claims history statement independently of their former place of residence. This would 
ensure that those moving across borders and applying for a new MTPL insurance would 
be treated in the same way as domestic residents applying for motor insurance. 

For insurers that take into account claims history to determine premiums, it would imply 
they  are  required  to  take  into  account  claims  history  statements  provided  by  insurers 
based  in  another  Member  State,  and  to  be  transparent  on  the  use  of  claims  history 
statements. For insurers not taking into account claims history, there would be no change 
(other than the harmonisation of format).  

For  policyholders  and  supervisors,  the  transparency  requirement  on  the  use  of  claims 
history  statements  by  insurers  would  facilitate  the  verification  of  how  claims  history 
statements  are  taken  into  account.  This  would  facilitate  enforcement  of  the  non-
discrimination requirement.  

A potential cost of the measure would be treatment of disputes involving policyholders 
alleging discrimination; this could require internal resources from motor insurers. 

Assessment 

This  option  would  contribute  to  the  equal  treatment  of  policyholders  moving  across 
borders and therefore reduce the risk of discrimination on the basis of (former) residence. 
As outlined in  the baseline scenario, the market segment of  mobile  citizens requiring a 
new motor insurance is small and therefore not specifically targeted by insurers, therefore 
competitive forces have not resolved this issue.  

This  option  would  be  the  most  effective  as  it  would  combine  standardisation  of  the 
template, non-discrimination regarding claims history statements and transparency on the 
use  of  the  claims  history  statement  by  the  insurer.    A  more  standardised  content  and 
template of claims history statements would facilitate the comparison and verification of 
authenticity  by  the  new  insurer.  The  non-discrimination  requirement  on  the  use  of  the 
claims  history  statement  would  ensure  equal  treatment  of  prospective  policyholders  by 

49 

 
 
insurers. In addition, the transparency requirements would allow for the verification by 
policyholders  on  how  the  claims  history  statement  is  taken  into  account  and  allow  for 
effective enforcement by supervisors.  

Comparison of options 

Option 2 would have very limited impact compared to the baseline scenario as it would 
lead to uncoordinated action by Member States and claims history statements would most 
likely not be standardised across all EU Member States. Just as in the baseline scenario, it 
would remain difficult to authenticate a claims history statement issued by an insurer in 
another  Member  State,  creating  reluctance  to  take  it  into  account  when  calculating 
premiums.  There  would  be  no  uniform  requirements  on  insurers  to  ensure  that  claim 
history statements are treated the same way.  

Option 3 would be beneficial compared to the baseline scenario as it would create more 
standardisation in the claims history statement in comparison with the existing voluntary 
code  of  conduct.    Standardisation  of  content  and  format  of  claims  history  statements 
would  facilitate  the  verification  of  authenticity  of  statements  originating  from  insurers 
based in another Member State. This would mean that claims history statements are more 
likely to be taken into account by a prospective insurer in case of citizens moving across 
borders. However, in the absence of an obligation of equal treatment and in the absence 
of  transparency  on  how  claims  history  statements  are  taken  into  account  by  insurers  to 
determine  premiums,  it  would  be  very  difficult  to  verify  by  prospective  policyholders 
whether their information on claims history is effectively taken into account.  

Option  4  would,  in  addition  to  option  3,  explicitly  require  insurers  to  grant  equal 
treatment  as  regards  claims  history  statements  between  all  prospective  policyholders 
within the EU. In case an insurer uses claims history statements to determine premiums, 
it would be effectively required to take into account claims history statements provided 
by  insurers  based  in  another  Member  State.    This  would  ensure  an  equal  treatment  of 
claims  history  statements  between  domestic  policyholders  and  those  moving  across 
borders, reducing the risk of undue discrimination. Furthermore, this option is supported 
by a consumer organisation63 in its response to the public consultation.  

Therefore, the preferred option is option 4.  

        Objectives 

. 

Objective 1 

Objective 2 

EFFECTIVENESS 

Policy  
option  

Ensure high 
level of 
protection for 
victims of motor 
vehicle 
accidents 

Ensure fair 
treatment of 
policyholders 
across the EU 

EFFICIENCY 

(cost-
effectiveness) 

Coherence 

SCORE 

63   BEUC contribution to the public consultation on the review of the Motor Insurance Directive. 

50 

 
 
 
 
 
 
 
 
 
 
                                                            
1. Baseline scenario 

 n.a. 

0 

0 

0 

0 

- 

≈ 

≈ 

n.a. 

2. Recommendation to 
Member States on claims 
history statements 
3. Harmonising the template 
and content of a claims 
statements, 
4. Impose a non-
discrimination clause for the 
treatment of claims history 
statements and a disclosure 
requirement  
Magnitude of impact as compared with the baseline scenario (the baseline is indicated as 0): ++ strongly 
positive; + positive; – – strongly negative; – negative; ≈ marginal/neutral; ? uncertain; n.a. not applicable 

n.a. 

n.a. 

++ 

+ 

+ 

+ 

+ 

+ 

4 

3 

1 

. 

Impact on stakeholders  

Claims history statements only concern insurers and policyholders. 

Option 2, a recommendation to Member States, would have limited or marginal impact 
compared  to  the baseline  scenario on all  affected stakeholders.  The main  reason is that 
there would be uncoordinated action and therefore the existing problems of acceptance of 
claims history statements in cross-border situations would not be addressed. In particular 
there  would  continue  to  be  differences  in  claims  history  statements,  making  it  difficult 
for  insurers  to  authenticate  claims  history  statements  issued  by  foreign  providers  and 
creating reluctance to take them into account. Therefore, no fundamental changes are to 
be expected for policy holders moving across borders and seeking new MTPL insurance 
as regards the acceptance of claims history statements.   

Option 3, the harmonisation of the template and the claims history statement, would be 
beneficial for policyholders and insurers in so far as it would facilitate the verification of 
authenticity  of  claims  history  statements  and  the  exchange  of  information  between 
insurers.  Policyholders  moving  from  one  Member  State  to  another  would  benefit  from 
lower  premiums  given  higher  no-claims  discounts.  For  insurers  it  would  require 
modifying the existing templates which would entail an initial though limited compliance 
cost,  as  the  Directive  already  requires  insurers  to  provide  a  claims  history  statement  to 
policyholders if they move to another insurer. The respective administrative and IT costs 
are projected at EUR 4.0-8.1 million across the entire industry64 these are mainly one-off 
costs necessary to implement the system.  

Option 4 would be more beneficial for policyholders because it would grant new rights to 
not be discriminated against as regards the treatment of the statement.  The total benefit 

64  This  estimate  assumes  that  the  change  of  template  would  require,  on  average,  the  equivalent  of  1-2 
weeks FTE per insurer in order to carry out the necessary changes to IT systems (assuming an average 
annual salary of EUR 75,000), plus and additional EUR 2,500  – 5,000 to cover other administrative 
and legal costs. 

51 

 
 
 
 
 
 
 
 
 
 
 
                                                            
for policyholders across the EU is estimated to lie in the range of €4.2– 12.7 million65 on 
a recurring annual basis. 

Additional costs for insurers would be limited to those for developing a statement of their 
treatment  of  foreign  no-claims  statements,  adopting  the  required  template,  and  dealing 
with any individual complaints of alleged discrimination.  

In  their  contributions  to  the  public consultation, all  consumer  organisations  support the 
harmonisation  of  claims  history  statements  (option  3).  One  consumer  organisation, 
BEUC,  favours  option  4,  ensuring  equal  treatment  of  policyholders.  Some  industry 
stakeholders see room for harmonisation of claims history statements but most insurers 
consider the existing voluntary code of conduct sufficient.  

Victims 

Insurers 

National 
compensation 
bodies 

Policyholders 
of 
insurance 

motor 

1. 
scenario 

Baseline 

0 

n.a. 

0 

≈ 

0 

≈ 

0 

≈ 

n.a. 

↑ or ≈ 

Na 

↑ or ≈ 

n.a. 

↑ or ≈ 

Na 

↑ 

2. 
Recommendation 
to 
Member 
States  on  claims 
history 
statements 

3.  Harmonising 
the  template  and 
a 
content 
claims 
statements, 

of 

4.  Impose  a  non-
discrimination 
requirement 
for 
the  treatment  of 
claims 
history 
statements and a 
disclosure 
requirement  

Magnitude of impact on stakeholder: ↑ positive, ↑↑ strongly positively,  ≈ marginal/ neutral, ↓ negative,  ↓↓ 
strongly negatively affects stakeholder. 

65  This  estimate  is  based  on  the  EU  average  premium  paid  (EUR  250  –  Source:  Insurance  Europe),  the 
amount  of  people  of  working  age  moving  to  another  Member  State  per  year  (1,692,000  in  2014  – 
Source:  ESTAT)  while  assuming  that  20%  of  people  are  affected  by  discriminatory  treatment  of 
claims history and that premiums will be 10-30% higher compared to cases where the claims history is 
effectively taken into account.    

52 

 
 
 
 
                                                            
PREFERRED OPTION   

Overall impact of the preferred option 

Under  the  preferred  option,  in  case  of  insolvency  or  winding  up  of  an  insurer,  there 
would  be  clear  responsibilities  for  compensation  bodies  set  out  at  EU  level  for  both 
initial  compensation  of  victims  and  ultimate  financial  responsibility  for  claims.    This 
would enhance the protection of victims in cases of insolvency of an insurer, giving the 
same level of protection as that already provided in the Directive for accidents involving 
uninsured  or  untraced  vehicles.  Under  the  preferred  option  there  is  no  possibility  for 
Member  States  to  unilaterally  withdraw,  negotiate  opt-outs  or  set  limitations  on  the 
timing or coverage of claims at national level below the standards set at EU level, as is 
today  the  case  under  existing  voluntary  agreements.  The  preferred  option  would  also 
provide incentives for supervisors of insurers mainly operating on the basis of freedom to 
provide services and with limited domestic coverage, in order to avoid insolvencies.  

Under  the  preferred  option,  the  minimum  protection  of  victims  of  motor  insurance 
accidents would be guaranteed at EU level by ensuring equal minimum amounts of cover 
for  personal  and  material  damage  at  all  times  in  all  EU  Member  States.  This  would 
contribute to the objective of a ensuring a high level of protection of victims across all 
Member States. In a number of Member States (BE, DE, DK, FI, IE, LU, SE, SK, UK), 
minimum  amounts  of  cover  would  remain  considerably  higher  than  those  in  the 
Directive,  providing  higher  levels  of  protection  for  victims.  Such  higher  levels  of 
coverage would be beneficial in cases of large accidents with very serious personal injury 
or material damage, above the minimum amounts set in the Directive. As there are only 
limited  increases  in  the  minimum  amounts  of  cover,  there  would  be  only  very  minor 
impact on premiums for policyholders in certain Member States.  

Uninsured  driving  remains  a  problem  that  should  be  addressed  at  both  national  level 
and  at  EU  level.  In  line  with  the  principle  of  subsidiarity,  Member  States  remain 
responsible  to  take  all  necessary  actions  to  combat  uninsured  driving  and  enforce  the 
insurance obligation of the Directive at national level. This can be done at national level 
by  conducting  sufficient  insurance  checks,  prevention  campaigns  and  exchange  of 
information  between  competent  authorities.  If  necessary,  the  Commission  could  in 
principle  launch  infringement  procedures  against  Member  States  which  fail  to  take 
adequate  measures  against  uninsured  driving  at  national  level.  At  EU  level,  allowing 
unobtrusive  checks  would  provide  an  additional  tool  for  Member  States  to  address 
uninsured driving involving vehicles normally based in another Member State. Member 
States would be allowed to conduct unobtrusive checks on motor insurance entering their 
territory from another Member State. Therefore, uninsured driving deriving from cross-
border  traffic  would  be  easier  to  detect  and  Member  States  could  better  enforce  the 
insurance obligation. Member States could determine the necessary extent of unobtrusive 
checks.  A  reduction  in  uninsured  driving  would  be  beneficial  for  all  stakeholders,  as  it 
reduces claims on guarantee funds. For insurers it could lead to greater uptake of MTPL 
insurance,  in  particular  in  Member  States  with  high  levels  of  uninsured  driving.  In  a 
competitive  market  this  could  eventually  lower  premiums  for  policyholders.  For  EU 
citizens,  reducing  uninsured  driving  reduces  risks  of  accidents  caused  by  uninsured  or 
untraceable drivers and contributes to a high level of protection of victims.  

53 

 
 
As regards claims history statements, the preferred option would harmonise the format 
and content of claims history statements, allowing for citizens moving across borders a 
more  easy  authentication  and  acceptance  of  such  a  statement  by  providers  in  a  new 
Member State. Furthermore, based on the transparency on how claims history statements 
are taken into account to calculate premiums, prospective consumers and supervisors of 
insurers  would  be  better  able  to  verify  that  insurers  do  not  engage  in  discriminatory 
treatment based on previous residence in another Member State.  

Summary of impacts of the preferred option: 

EFFECTIVENESS 

        Objectives 

.  Objective 2 

Objective 3 

Ensure high level of 
protection for victims of 
motor vehicle accidents 

Ensure equal treatment 
of policyholders across 
the EU 

EFFICIENCY 

(cost-
effectiveness) 

COHERENCE 

SCORE 

 0 

0 

0 

0 

0 

+ 

n.a. 

++ 

Policy  
option  
1. 
scenario 
Insolvency 

Baseline 

Option 3 
Set out rules on initial 
payment  and  ultimate 
of 
compensation 
victims  of 
insolvent 
insurers. 
Minimum amounts of cover 

Option 2 
Set  minimum  amounts 
equal  in  all  Member 
States. 
Uninsured driving 

Option 2 
Allow 
border 
insurance checks. 
Claims history 

unobtrusive 
motor 

+ 

+ 

Option 4  
claims 
Standardised 
history  template  and  
a  non-discrimination 
clause 
the 
treatment  of  claims 
statements 
history 
with 
disclosure 
requirement. 

for 

a 

. 

n.a. 

++ 

+ 

+ 

 5 

4 

4 

+ 

3 

+ 

+ 

+ 

+ 

+ 

+ 

54 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Macro-economic impacts  

The  overall  macro-economic  of  the  preferred  package  is  considered  low  following  a 
qualitative assessment of the policy options shown in Annex 3.  

Rules  on  the  consequences  of  insolvency  will  not  affect  the  occurrence  of  insolvency 
cases, and potential damages and claims for motor accidents linked to insolvent insurers 
remain  unchanged.  Consequently,  there  will  be  no  material  macro-economic  impact. 
Only  the  biggest  insurance  insolvencies  in  the  world  (for  example  AIG)  have  had  a 
macro-economic  impact.  The  main  economic  benefit  remains  at  micro-economic  level, 
by ensuring an orderly process for the allocation of responsibilities in case of insolvency. 
This is expected to reduce the cost of litigation linked to the insolvency of an insurer for 
all stakeholders involved.   

As regards minimum amounts of cover, there will be some limited alignment of the level 
of MTPL premiums in some Member States which previously benefited from a transition 
period. Alignment of the minimum amounts of cover could create incentives for insurers 
in  a  few  Member  States  to  increase  premiums  to  cover  for  higher  claims.  There  is 
however  no  evidence  on  the  correlation  between  minimum  amounts  of  cover  and 
insurance premiums. In particular, the current divergence of insurance premiums across 
Member  States  as  shown  in  Chart  1  below  results  from  a  wide  range  of  factors  and  is 
expected  to  continue.  Some  Member  States,  such  as  France  and  Belgium,  set 
significantly  higher  minimum  amounts,  (e.g.  personal  damage  is  set  at  an  unlimited 
amount of cover) compared to the MID and the level of MTPL premiums does not differ 
from other Member States in the same magnitude.   

Chart 1: Average MTPL premiums of a selection of Member States 

600

500

400

300

200

100

0

IT CH BE DE GR NL ES FR FI

SI HR PT PL TR CZ EE HU LV

2012,(€) 

2013,(€) 

2014,(€) 

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

Table  2  below  shows  the  expected  change  in  minimum  amounts  compared  to  data 
reported  by  the  Council  of  Bureaux  in  2015.  For  personal  injury  and  material  damage, 

55 

 
 
 
there would be no change in respectively 12 and 11 Member States. For respectively 4 
and  6  Member  States  the  increase  in  minimum  amount  would  be  limited  to  below  10 
percent.  For  respectively  12  and  11  Member  States  the  increase  would  be  below  23 
percent. As explained above, there is no direct correlation between the minimum amount 
of cover and premiums. However, actual differences with current minimum amounts will 
be lower as some Member States have increased their levels of minimum amounts due to 
an update of minimum amounts in 2016 to take into account inflation.  

Table 2: Estimated changes in minimum amounts of cover by Member State compared to 
2015 data66 

% change in minimum amount of 
cover for 

Personal Injury 

Material Damage 

No change 

BE,  CZ,  DK,  DE,  IE,  ES,  FR, 
CY, LU, FI, SE, UK 

BE,  CZ,  DK,  ES,  FR,  CY,  LU, 
HU, FI, SE, UK 

< 10% 

EE, HR, NL, AT,  

DE, EE, IE, HR, NL, AT 

>10% and < 23% 

BG, IT, LT, LV, HU, EL, PL, PT, 
RO, SK, SI,  

BG,  EL,  IT,  LT,  LV,  MT,  PL, 
PT, RO, SK, SI,  

Source: own calculations based on report from CoB see Annex 4  

As  regards  claims  history  statements,  the  economic  impacts  are  limited  as  this  affects 
only  persons  moving  abroad  applying  for  a  new  motor  insurance.    Furthermore,  the 
current  Directive  already  requires  insurers  to  provide  a  claims  history  statement  on 
request  of  a  policyholder,  so  the  impact  is  limited  to  changing  the  template  itself. 
Therefore, for insurance at micro level there are some limited one-off compliance costs 
to adopt a new template.  

Therefore, the overall market trends described in Annex 4 will remain unchanged.  

Small and medium-sized enterprises 

The proposal does not entail any specific impact for small and medium-sized enterprises 
except  those  which  are  insurers  or  policyholders  of  motor  insurance.  Motor  insurers, 
including those which are SMEs, will incur the costs indicated in the above box on costs. 
SMEs  and  micro-enterprises  will  be  affected  as  operators  of  vehicles  which  require 
insurance.  If  they  are  located  in  Member  States  where  the  minimum  amounts  of  cover 
will be revised slightly upwards, very small increases in insurance premiums are possible 
(this is also the case for individual policyholders in those Member States). 

66 Actual differences with current minimum amounts will be lower as some Member States have increased 
their levels of minimum amounts as some Member States have updated minimum amounts to take into 
account  inflation  following  a  Commission  Communication  on  minimum  amounts  in  June  2016. 
(COM/2016/0246 final)  

56 

 
 
                                                            
REFIT (simplification and improved efficiency) 

The evaluation of the Motor Insurance Directive (Annex 7) did not identify major flaws, 
apart  from  the  issues  assessed  as  part  of  this  impact  assessment.  In  general,  the 
evaluation  concluded  that  stakeholders  and  industry  practitioners  considered  that  the 
current  Directive  achieves  the  objective  of  a  high  protection  of  victims  and  free 
circulation  of  vehicles  in  an  efficient  and  effective  way.  The  evaluation  concluded  that 
only  targeted amendments  of the Directive should  be considered in  a number of policy 
areas which are assessed in this Impact Assessment. Consequently the evaluation did not 
reveal  potential  for  simplification  or  scope  for  cost  reduction  in  the  application  of  the 
Directive. During the public consultation, which was conducted as part of the evaluation, 
stakeholders  did  not  come  forward  with  specific  concerns  which  would  allow 
simplification or cost reduction in the area of EU Motor Insurance Policy. A number of 
concerns  expressed  by  stakeholders  about  the  Directive,  which  were  not  judged  to  be 
serious  enough  or  sufficiently  substantiated  to  warrant  amending  the  Directive,  are 
described in section 2.3.  

The  preferred  package  of  preferred  options  does  not  contain  any  specific  measures 
regarding  simplification  and  cost  reduction  but  enhances  the  existing  gaps  identified 
during  the  evaluation.    Regarding  insolvency  of  insurers,  there  will  be  less  costs  of 
litigation as the Directive would set clear roles on initial payment of the victim and the 
ultimate responsibility for the claim. Furthermore, reducing risk of uninsured driving via 
unobtrusive  checks  could  reduce  claims  on  compensation  bodies  and  contributions  for 
insurers.  In  addition,  more  standardisation  of  claims  history  statements  would  simplify 
verification of the authenticity of claims history statements provided by foreign insurers. 
Finally, the preferred package of option does not entail any new reporting requirements 
to public authorities.  

EU budget 

The proposal does not create any obligations for the EU budget. 

Social impacts 

There is no significant  social impact expected. A high  level  of protection of victims of 
motor accidents is beneficial to all citizens in the EU.  

A possible social impact is the affordability of motor insurance across the EU. If motor 
insurance  premiums  were  to  become  unaffordable,  this  would  increase  the  risk  of 
uninsured  driving  with  negative  effects  for  victims,  compensation  bodies  and  insurers 
(via contributions to finance the cost of claims due to uninsured driving).  

However the preferred package makes a trade-off between protection of victims and risks 
of potential increases of premiums of motor insurance. In particular the preferred options 
only include an alignment of the minimum amounts of cover to ensure equal minimum 
protection across Member States.  

57 

 
 
Impact on third countries  

The  proposal  does  not  create  any  new  obligations  concerning  relations  with  third 
countries. Consequently, no impact on third countries is expected.  

Environmental impacts 

No  significant  environmental  impact  is  expected  as  there  will  be  no  impact  on  traffic 
volume.    

HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED?  

The proposed rules should include a review after five years of application of the amended 
Directive.  As  part  of  the  evaluation,  the  European  Commission  shall  regularly  monitor 
the  application  of  the  Directive  based  on  the  following  key  performance  indicators 
(KPIs)67:  

KPI  1  Number  of  victims  and  amount  of  outstanding  claims  due  to  delays  in 
payments following cross-border insolvency cases  
The  number  of  victims  and  amount  of  outstanding  claims  due  to  delays  caused  by 
insolvent  cross-border  insurers  will  be  an  indicator  of  effectiveness  of  the  provisions 
aimed to enhance the protection of victims affected by insolvency cases. This indicator 
will however only be meaningful if cross-border insolvencies of insurers actually occur 
during  the  reference  period.  It  is  anticipated  that  both  number  of  victims  and  amounts 
outstanding would decline. Ideally, these figures should approach near-zero figures over 
time,  even  if  insolvencies  occur.  This  information  will  be  obtained  through  surveying 
national compensation bodies which will be responsible to deal with the costs of claims 
in  case of insolvency  of an insurer. The Council of Bureaux could have a coordinating 
role in obtaining this information.  

KPI 2: Level of minimum amounts of cover in Member States 
The implementation of harmonised level of minimum amounts of cover will be verified 
during  the  transposition  control  of  the  amended  Directive.  Deviations  from  the  set 
minimum  level  would  indicate  an  infringement  which  could  then  be  addressed 
accordingly. This information will be obtained through regular transposition checks.   

KPI 3: Amount of claims due to uninsured driving of cross-border traffic  
The  annual  amount  of  claims  due  to  uninsured  cross-border  driving  will  provide  a 
measure of the effectiveness of unobtrusive motor insurance checks by Member States. It 
will  be  particularly  useful  to  compare  the  future  development  of  claims  between  those 
Member  States  that  implement  such  checks  and  those  that  do  not.  This  will  not  only 
demonstrate  the  magnitude  of  the  problem  of  uninsured  driving  but  can  also  help 
Member  States  to  improve  the  effectiveness  of  their  respective  cross-border  insurance 
check  systems.  Member  States  will  be  regularly  asked  whether  they  have  instituted 
unobtrusive border insurance checks, and if so, at how many locations. Once such checks 

67A detailed description of the KPIs can be found in Annex 12.  

58 

 
 
 
 
 
                                                            
have been established, it is projected that the number of claims will start to decline.  This 
information will be obtained by surveying national compensation bodies responsible for 
dealing with claims in case of uninsured driving. The Council of Bureaux could have a 
coordinating role in obtaining this information.  

 KPI 4: Number of complaints following claims history statements 
The  number  of  complaints  regarding  alleged  discriminatory  treatment  of  claims  history 
statements  when  moving  to  another  Member  State  will  provide  a  direct  indication  of 
whether  the  new  provisions  are  effective  in  practice.  Once  these  provisions  stipulating 
non-  discriminatory  treatment  have  started  to  apply,  it  is  expected  that  the  number  of 
such  claims  will  reduce  significantly.  Likewise,  a  concentration  of  complaints  within 
certain  Member  States  could  imply  deficiencies  in  the  nationally  transposed  law  or,  if 
related  to  a  single  insurer,  reveal  cases  of  non-compliance.  This  information  could  be 
obtained through surveying national consumer protection bodies and national consumer 
organisations.  

59 

 
 
 
 
ANNEX  1:  PROCEDURAL  STEPS  CONCERNING  THE  PROCESS  TO  PREPARE  THE  IMPACT 
ASSESSMENT REPORT AND THE RELATED INITIATIVE 

  Lead  Directorate-General:  Directorate-General  for  Financial  Stability,  Financial 

Services and Capital Markets Union. 

  DECIDE PLANNING Reference: 2016/FISMA/113 

  An 

inception 

impact 

assessment  was  published  on  24 

July  2017: 

https://ec.europa.eu/info/law/better-
regulation/initiative/39849/attachment/090166e5b3f48c10_en 

  Organisation and timing of Inter Service Steering Group’s meetings: two meetings of 
the  Inter  Service  Steering  group  on  12  December  2017  and  22  January  2018.  The 
Inter  Service  Steering  Group  included  representatives  of  the  Directorates  General, 
Competition  (COMP),  Economic  and  Financial  Affairs  (ECFIN),  Employment 
(EMPL),  Internal  Market,  Industry,  Entrepreneurship  and  SMEs  (GROW),  Justice 
and  Consumers  (JUST),  Taxation  and  Customs  Union  (TAXUD),  Trade  (TRADE), 
the Legal Service (LS) and the Secretariat General (SG), DG Transport (MOVE). 

  Evidence used in the impact assessment: 

o  Replies by stakeholders to the following public consultations:  

  From  28  July  until  20  October  2017:  a  public  consultation  on  the 
review  of  Directive  2009/103/EC  on  Motor  Insurance  to  obtain 
feedback from stakeholders on all elements of the Directive, including 
some  specific  elements  (e.g.  the  scope,  portability  of  claims  history 
statements  and  the  role  and  functioning  of  motor  guarantee  funds), 
impacts: 
amendments 
possible 
http://ec.europa.eu/finance/consultations/2016/personal-pension-
framework/index_en.htm  

options 

their 

and 

for 

  From 30 September 2015 to 31 January 2016: a public consultation in 
the  framework  of  the  Call  for  Evidence  on  the  EU  regulatory 
framework  for  financial  services  inviting  feedback  and  empirical 
the  benefits,  unintended  effects,  consistency  and 
evidence  on 
legislation: 
coherence 
http://ec.europa.eu/finance/consultations/2015/financial-regulatory-
framework-review/index_en.htm   

financial 

the 

of 

o  A  roundtable  on  the  review  of  Directive  2009/103/EC  on  Motor  Insurance 
which  took  place  on  12  July  2017  including  stakeholder  groups  including 
insurers,  consumer  organisations,  Council  of  Bureaux  and  Member  States' 
Authorities.  

o  A  public  hearing  on  the  Call  for  Evidence,  held  on  17  May  2016: 
http://ec.europa.eu/finance/events/2016/0517-call-for-evidence/index_en.htm  
o  Discussions  with  experts  from  Member  States'  Authorities  in  2015  and    22 
September  2017  (Expert  Group  on  Banking,  Payments  and  Insurance 
(Insurance Formation). See summary in Annex 2. 
o  Statistics and reports from the Council of Bureaux 

60 

 
 
 
 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION SYNOPSIS REPORT 

This section summarizes the outcomes of the consultative work on the evaluation of the 
Motor Insurance Directive. The consultative work consisted of 1) meetings with Member 
States Experts, 2) a roundtable with stakeholders and 3) a public consultation.  

1. EXPERT GROUP MEETINGS OF MEMBER STATES 

Two  meetings  of  the  Expert  Group  on  Banking,  Payments  and  Insurance  took  place  in 
2015, respectively on 20 May and 14 December. The first meeting showed that Member 
States had differing interpretations of the scope of the Directive before the Vnuk ruling; 
some were incompliant with the Directive as interpreted in the Vnuk ruling and requested 
a legislative change of the scope. In the second meeting, the discussions on the scope of 
the directive continued, and potential legal consequences of framing the Directive's scope 
around  some  notion  of  traffic  were  analysed.  A  third  meeting  of  the  Expert  Group  on 
Banking,  Payments  and  Insurance  took  place  on  22  September  2017  following  a 
questionnaire  that  was  circulated  addressing  all  the  topics  of  the  evaluation  report 
(similar to the public consultation questionnaire).  

The  main  findings  of  the  expert  group  of  22  September  2017  can  be  summarised  as 
following: 

On portability of no-claims statements (bonus-malus), there was some support from some 
Member  States  for  harmonising  the  format  of  statements  and  increasing  the  period  of 
reference  data.  One  Member  State  proposed  the  harmonisation  of  the  content  of  a  no-
claims  statement.  There  was  very  little  support  for  making  statements  binding  on  the 
receiving insurer. 

On  protection  of  victims  in  cases  of  cross-border  insolvencies  of  motor  insurers,  there 
was  consensus  among  Member  States  that  there  is  a  real  problem  which  requires  EU 
intervention,  but  no  consensus  on  details,  especially  the  question  of  whether  the  motor 
guarantee  fund  of  the  home  or  host  Member  State  should  be  ultimately  liable  in  such 
cases. 

On  the  scope  of  the  MTPL  obligation  for  motor  vehicles  (in  light  of  the  CJEU's  Vnuk 
judgement), 7 Member States were in favour of urgently narrowing the scope (to exclude 
motor racing and/or private land), one was firmly against (saying that it already is Vnuk-
compliant), some others displayed a more nuanced intermediate position.  

On minimum amounts of cover, there was wide support for harmonising the amounts in 
different Member States and cleaning up procedures and reference dates for revision, but 
little  support  for  differentiating  minimum  amounts  for  different  categories  of  vehicle 
(though some Member States do this domestically). 

On  autonomous  vehicles,  all  Member  States  were  of  the  opinion  that  such  vehicles 
should remain within the scope of the MID. 

Member States committed to provide written input by 20 October 2017 (the same date as 
the end of the public consultation). The following Member States provided written input: 

61 

 
 
 
 
 
 
 
Belgium,  Czech  Republic,  Denmark,  Estonia,  Finland,  France,  Germany  (and  the 
German Federal State of Bavaria), Ireland, Italy, Lithuania, Luxembourg, Malta, Poland, 
Slovakia, Spain, Sweden, UK. 

Most  written  replies  confirm  positions  expressed  orally  in  the  meetings  and  do  not 
contain data. Only the UK provided a calculation of the effect of the application of the 
scope of the Directive as interpreted by the CJEU in the UK, which can be summarised in 
the table below ("comprehensive option" refers to the scope as interpreted in Vnuk): 

It should be noted that these cost calculations are based on unlimited cover for personal 
injury and material damage, as applied in the UK, not the minimum amounts required by 
the Directive. The high role of expected fraud in the estimated costs is also noteworthy. 

Following  bilateral  contacts,  the  Finnish  authorities  confirmed  that  Finland  already 
requires MTPL insurance in a manner compatible with the Vnuk judgement of the CJEU, 
also  with  regard  to  motor  sports,  and  stated  that  motor  sports  thrive  in  Finland  at  both 
professional and amateur level. 

2. ROUNDTABLE ON THE REVIEW OF MID, 12 JULY 2017 
The participants of the roundtable held on the 12 July 2017 were the following: Council 
of  Bureaux  (COB),  Association  of  British  Insurers  (ABI),  Fédération  Française  de 
l'Assurance  (FFA),  UNESPA  (Unión  Española  de  Entidades  Aseguradoras  y 
Reaseguradoras),  Insurance  Europe,  AMICE,  European  Cyclists'  Federation  (ECF), 
European  Consumer  Organisation  (BEUC),  German  Insurance  Association  (GDV), 
Fédération International de l'Automobile (FIA). 

The  discussion  was  dedicated  to  the  evaluation  of  the  Motor  Insurance  Directive 
2009/103/EC. It focused on the most advanced topics of the exercise, which are (1) the 
scope  of  the  Directive,  (2)  technological  evolution/driverless  cars,  (3)  portability  of 
claims  history  statements,  (4)  protection  of  victims  in  case  of  insolvency  and  (5) 
adaptation of minimum amounts of cover. 

1. 

Scope 

62 

 
 
 
 
 
 
 
 
The participants were invited to comment on options published in the Inception Impact 
Assessment  (IIA)  of  June  2016  on  how  to  possibly  adapt  the  scope  of  the  Directive 
following the Vnuk-ruling (C-162/13).  

Most  participants  favour  option  3,  which  entails  limiting  the  scope  of  the  Directive  to 
accidents that occur in traffic.  

However,  FFA  believes  no  adaptation  is  necessary,  as  French  law  covers  accidents  on 
private land, e.g. garages, and also victims of motor races are covered.  Similar position: 
GDV. BEUC is yet to consult its members.  

FFA,  ABI,  UNESPA  stated  there  is  no  MTPL  cover  for  racers  in  motor  sports  in  their 
countries. ABI considers this the single biggest issue of the REFIT – it estimates that the 
inclusion of motor sports in the scope will lead to increase of premiums of 10%.  

FIA will try to submit additional data on the likely effects for motor sports. In principle, 
it is in favour of option 3 in the IIA, but has to discuss internally. 

UNESPA was also of the view that if tractors and industrial vehicles would have to be 
covered  under  the  MID,  instead  of general  liability  policies  that  are  used  now  to  cover 
agricultural and industrial activities, this might have a substantial effect on premiums, as 
this  would  increase  the  minimum  amounts  of  cover.    Due  to  this  movement  from  the 
general  liability  to  MTPL  policies,  UNESPA  estimated  the  impact  on  the  premiums  as 
€300 million, as the usual cover for a liability policy is around €300,000, far from de €70 
million per accident for personal injuries in MTPL. 

COB  warned  that  if  vehicles  are  exempted  in  one  Member  State  this  would  qualify  as 
uninsured in other Member States. 

ECF  is  concerned  that  the  Commission  is  planning  to  include  (low  speed)  electronic 
bicycles in the scope. ECF is against "mandatory" third party liability insurance for such 
bicycles.  In  general,  damage  caused  to  third  parties  is  negligible  –  and  if  citizens  were 
obliged  to  take  a  MTPL  insurance  (and  thus  have  to  pay  premium),  this  would 
disincentivise  the  use  of  electric  bicycles.  Moreover,  it  should  not  be  left  to  individual 
Member  States  to  exempt  electronic  bicycles,  as  this  would  create  a  patchwork  of 
different rules. 

FIA:  shares  the  opinion  that  these  bicycles  are  not  vehicles  in  the  sense  of  the  MID, 
because not "propelled by mechanical power", but only "assisted by mechanical power" 
until a certain speed limit (approx. 25km/hour).  

ABI  is  not  in  favour  of  including  electric  bicycles,  or  covering  accidents  on  private 
property,  because  this  could  potentially  result  in  more  fraudulent  claims.  It  strongly 
supports option 3. 

2. 

Technological evolution 

All participants agreed that the system of compensation under the MID is suitable even 
for fully automated vehicles and does not need an adaptation. Shift to product liability is 
not desirable, because the protection afforded under these rules is much weaker than it is 

63 

 
 
in  the  case  of  the  MID.  Driverless  cars  is  yet  a  very  topical  issue  and  participants 
welcomed  the  issue  being  addressed  in  the  forthcoming  consultation.  The  biggest  issue 
for consumers and industry, however, is access to data. UNESPA suggested that insurers 
should have the right to obtain the relevant data when accidents occur. Insurance Europe 
suggested  that  both  manufacturers  and  software  insurers  may  be  held  accountable  and 
referred to the important work underway in the context of the GEAR 2030 project. 

GDV  informed  that  Germany  has  adopted  new  legislation  related  to  highly  automated 
vehicles that establishes that there must be a recording of the data in the car to allow the 
investigation of accidents. The data must be shared with the owner of the vehicle. 

COB agreed that it is currently not an issue, but pointed out that under the 1968 Vienna 
Convention a car is required to have a driver, whereas the MID is silent about the driver. 
It is important to keep fair and good protection of victims of accidents.   

BEUC expressed concerns about the sharing of data and the use of black boxes, which 
does  not  necessarily  result  in  lower  premiums  for  policyholders  who  use  such  boxes. 
Insurance Europe alluded to the experience in Italy, where approx. 5 million black boxes 
are  employed  and  which  did  result  in  a  reduction  of  the  premiums.  FIA  agreed  that 
insurers need access to data to determine the circumstances of an accident, but consumers 
must be aware of who has access to the data and have the right to decide if they want to 
share their data.  

3. 

Portability of claims history statements 

Several  participants  (e.g.  Insurance  Europe,  UNESPA)  said  that  they  did  not  recognise 
the  problem.  UNESPA  said  that  at  least  90%  of  the  Spanish  insurers  will  issue 
statements, if necessary in English. For instance, the FFA said that in the French market 
there is no such problem; there is a bonus-malus system and insurers give a reduction in 
premium  on  the  basis  of  a  claims  history  statement  without  discrimination.  In  France, 
this  statement  must  provide  details  of  the  accidents  suffered  last  five  years,  but  it  may 
also contain data referring to a previous period.  The FFA does not think that any changes 
are necessary; it does not support a rule requiring detailed information for a longer period 
of  time.  Similarly,  ABI  stated  that  in  the  UK  insurers  are  free  to  set  their  no-claims 
discount  policies  and  should  freely  decide  whether  or  not  to  accept  claims  statements 
from jurisdictions different driving conditions, etc. ABI  believes that at the most  a soft 
obligation (option 2) could be introduced. 

GDV, AMICE and Insurance Europe support any option, except option 4, which would 
entail  a  rigid  EU-wide system  of  coefficients  to  be  used  when  calculating  bonus  malus 
discounts.    GDV  is  flexible  on  the  extension  of  the  period  of  coverage  for  the  claims 
history  statement.  FIA  and  BEUC  support  option  3,  in  particular  a  regulatory  non-
discrimination clause. ECF and COB refrained from commenting on this topic. 

4. 

Protection of victims 

Participants supported the idea of further action, but rejected the idea of creating an EU-
wide guarantee scheme.  

64 

 
 
COB  said  that  most  Member  States  have  in  place  a  system  of  protection  in  case  of 
insolvency  of  insurers  through  national  Guarantee  Funds.  Others  (UK,  Romania  and 
Ireland) have other compensation bodies and only Sweden has no any protection scheme. 
There  should  be  a  clearer  distinction  in  the  paper  between  claims  of  visiting  victims 
under  the  Green  Card  system  or  claims  under  the  4th  Motor  Insurance  Directive,  and 
insolvency in case of FoS or FoE. 

ABI  supported  EU  action  to  establish  a  minimum  harmonisation  directive  concerning 
Insurance Guarantees Schemes. Insurance Europe expressed readiness to look into these 
issues and asked for further evidence to articulate the problems better.  

Several  participants  (e.g.  UNESPA,  FIA,  FFA,  and  GDV)  considered  that  the  home 
Member State should be held accountable.  

5. 

Minimum amounts of cover. 

Participants  supported  streamlining  the  procedures  to  adapt  and  review  the  minimum 
amounts of cover. However, the precise minimum amounts are less relevant for certain 
Member States, which already apply substantially higher minimum amounts (e.g. France, 
UK,  and  Spain).  Most  participants  were  not  convinced  of  the  necessity  to  introduce  a 
differentiation per type of vehicle and wondered about the possible impact on the level of 
premiums. The COB observed that the size of the vehicle does not necessarily matter for 
the possible damage that might be caused, e.g. also low speed bicycles could potentially 
cause a major accident.  

3. PUBLIC CONSULTATION FROM 22 JULY UNTIL 20 OCTOBER 2017 

A. Overview of respondents and key data: 

Total responses: 3478  
Responses by type of organisation: 

65 

 
 
 
 
 
 
• 
• 
• 

Private individuals: 2346 
Public authorities: 9 
Organisations: 1123 

Responses by Member State: 

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
• 
• 

UK: 2707 (mainly representing the motorsports sector – see below) 
Non-UK: 771 
- 

Germany:  405  (including  many  replies  which  are  part  of  the 
motorsports campaign) 
France: 24 
Belgium  66  (including  many  replies  which  are  part  of  the 
motorsports campaign) 
Spain 17 
Netherlands:  37  (including  many  replies  which  are  part  of  the 
motorsports campaign)  

- 
- 

- 
- 

Majority  of  responses  call  for  a  particular  treatment  for  the  motor  sports  sector  in  the 
Directive,  and  are  presumed  (even  where  this  is  not  explicitly  stated) to  be  inspired  by 
the Motor Industry Association campaign (see part C below). Most (but not all) of these 
responses are from the UK. 

B. Analysis of responses concerning key topics 

1. General evaluation of the functioning of the Directive 

The majority of respondents considered problematic the number of uninsured vehicles in 
Europe;  this  attitude  is  widely  shared  by  private  citizens,  industry,  consumer 
representatives  and  other 
institutions  (national  authorities  and  bureaux).  Some 
respondents perceived a reduction of uninsured driving in recent years, and some of them 

67 

 
 
 
 
 
 
 
gave their reasons to explain the problem of uninsured driving: affordability of premiums 
in  a  few  Member  States  and  the  lack  of  enforcement.  There  was  however  no  general 
support for additional measures in the Directive to reduce the levels of uninsured driving. 
Certain private citizens suggested several measures, like the increase of the collaboration 
among  national  authorities  and  higher  penalties,  and  consumers  associations  also 
supported the access of national police to databases of insured vehicles.  

2. Scope of the Directive 

An organised campaign from the motor sports industry (Motor Industry Association – see 
section C below) with coordinated responses calls for an exemption of motor sports from 
the scope of the Directive, so that vehicles participating in professional or amateur motor 
sports events would no longer need to have insurance cover in line with the Directive, at 
least as regards accidents between participating drivers. To achieve this objective, motor 
sport organisations called on supporters to respond to the public consultation on the basis 
of a template (see section C of this annex).  A majority of responses to the consultation 
call  for  the  exemption  of  motor  sports.  Motor  sports  stakeholders  consider  that  drivers 
participating in motor racing are aware of the risks and participate on a voluntary basis 
and  therefore  should  not  be  held  liable  for  damage  caused  to  other  drivers.  They  also 
claim that the requirement of motor insurance for motor racing would make motor racing 
events prohibitively expensive and risk undermining the whole sector, covering drivers, 
manufacturers,  event  organisers  etc.  As  a  consequence,  in  their  view  it  would  not  be 
economic to organise or participate in motor racing. However, no concrete evidence was 
supplied in any of the responses making this point to back up such claims, in light of the 
fact  that  certain  Member  States  with  an  active  motor  sports  sector,  such  as  Finland, 
already impose such an insurance requirement on motor sports vehicles. 

In  addition  to  the  comments  on  scope  dedicated  specifically  to  motor  sports,  two  main 
groups  remain.  One  group  of  respondents  favours  limiting  the  scope  to  public  roads, 
excluding private property with no public access. The other group of respondents favours 
linking location and function with the scope, i.e. to traffic and the transport of persons or 
goods.  Both  of  these  positions  would  also  effectively  include  an  exclusion  of  motor 
sports  activities  from  the  scope,  according  to  the  views  of  the  respondents,  but  also 
exclude  other  motor  vehicle  activities  in  addition  (for  instance,  accidents  caused  by 
agricultural  motor  vehicles  but  not  directly  related  to  the  transport  of  good  of  people). 
Certain issues with excluding private property were pointed out by some respondents: it 
raises the question of a precise definition and the treatment of publicly accessible private 
property like car parks. A subgroup proposed to exclude only private property which is 
not publicly accessible like airports, military bases or closed events.  

As  for  consumer  associations,  one  consumer  organisation  points  out  the  different 
interpretations  of  the  scope  of  the  MID  in  different  Member  states,  and  calls  for 
uniformity,  order  to  provide  legal  certainty  to  victims.    Another  consumer  association 
supports  a  limitation  of  the  scope  of  the  MID  to  vehicles  used  in  areas  to  which  the 
general  public  has  access.  Almost  all  consumer  associations  support  an  exclusion  of 
motor exports.  

68 

 
 
Several industry associations (linked with the bicycle sector) also favoured that all forms 
of bicycle transport, including Electrically Power Assisted Cycles (EPACs), fall outside 
the scope of the MID. 

National  Authorities  and  Bureaux  have  differing  views,  a  minority  supporting  a  broad 
scope, covering public and private roads, while a majority prefers a limitation to publicly 
accessible areas. A small minority of individuals and national insurance associations also 
support a broad scope also covering private property such as farms and industrial sites. 

3. Protection of victims in case of insolvency of a cross-border insurer 

The majority of respondents and the insurance industry associations recognise that there 
is  a  serious  issue  with  insolvency  of  cross-border  insurers,  which  can  cause  delays  to 
compensation of victims of accidents, and that this issue justifies EU-level intervention. 
Consumer  organisations  in  particular  consider  it  unacceptable  that  victims  might  face 
uncertainty about whom to seek compensation from in the case of an insurer becoming 
insolvent. One consumer organisation is of the view that the current voluntary agreement 
does not provide the necessary legal certainty for victims. 

Most responses which deal with this subject favour that a fund or compensation scheme 
in  the  home  Member  State  of  the  insurer  should  have  ultimate  responsibility  for 
compensation  of  the  victim  in  such  cases.  However,  in  order  to  ensure  speedy 
compensation,  many  replies  (including  most  consumer  organisations  and  bureaux) 
consider that victims should be able to seek compensation from a competent body in the 
Member  State  of  their  residence,  which  would  then  have  recourse  towards  the  body  of 
the Member State where the insurer has its head office.  

The  Council  of  Bureaux  takes  the  view  that  the  body  in  the  Member  State  where  the 
insurer  received  its  official  authorisation  should  bear  the  costs  of  final  settlement.  It 
points out however that it is also necessary to ensure proper financing of that body for the 
cases of insolvency, since in the event of underfunding of the fund, an insolvency could 
lead to the collapse of the whole system. 

4. Transferability of claims history statements 

Around  70  individuals  reported  non-acceptance  of  their  no-claim  history  statements 
abroad. Two respondents gave more details and reported the non-acceptance of a French 
and a Dutch statement, both in the UK. Some other respondents to the consultation, both 
institutional and private, acknowledge that there is "some" problem but without personal 
experience.  

In general, the insurance industry does not see any need for a change of the Directive on 
this point68. The industry is against any strict obligation on insurers, such as an obligation 
not to discriminate against policyholders coming from another member State as regards 

68 The Directive currently gives policyholders a right to obtain a statement of their claims history over the 

last 5 years, but does not impose any particular treatment of such a statement by a new insurer. 

69 

 
 
                                                            
claims history, which is seen as interference in the freedom to calculate premiums. The 
Council of Bureaux has no position on this issue. 

Some  stakeholders  see  a  need  for  standardisation  of  the  format  of  claims  history 
statements, while others refer to existing non-binding guidelines on this topic published 
by Insurance Europe, considering them sufficient. 

No  figures  were  provided  by  any  stakeholders.  Only  the  Czech  Insurance  Association 
mentioned  that  there  are  only  tens  of  such  requests  to  issue  a  claims  history  by 
policyholders  going  abroad,  and  considers  that  a  standardised  template  would  involve 
excessive administrative costs. 

Regarding  the  period  which  a  claims  history  statement  should  cover,  the  Insurance 
Association  of  Luxembourg  supports  a  15  year  period  to  be  taken  into  account,  a 
standardisation  of  format  and  an  obligation  for  insurers  to  take  the  claims  history 
statements  from  other  Member  States  into  account.  In  Luxembourg  such  an  obligation 
already exists. No other insurance association shares this position. 

A  few  consumer  organisations  believe  that  the  existing  5-year  period  is  sufficient  for 
assessing a policyholder's driving history. One consumer organisation (BEUC) considers 
that  a  longer  period  would  make  it  harder  to  verify  the  accuracy  of  the  claims  history 
statement.  Some  others  consider  that  7  or  10  years  as  applicable  in  national  law  is 
appropriate.  All consumer organisations consider that a standardisation of the format of 
the  claims  history  statement  would  be  welcome.  In  general  consumer  organisations 
consider that claims history should be taken into account for the calculation of premiums 
in  addition  to  other  factors.  A  few  consider  this  should  be  mandatory  while  others 
consider  this  should  not  be  compulsory  for  insurers.    A  majority  of  consumer 
organisations favour more transparency on how claims history is taken into account when 
calculating  premiums.  One  consumer  organisation  (BEUC)  alleged  that  many  Member 
States have removed the mandatory use of a bonus-malus system under pressure from the 
European  Commission,  arguing  that  this  amounted  to  unlawful  price  regulation. 
However,  following  a  ruling  from  the  European  Court  of  Justice  which  dismissed  the 
argument  above,  some  Member  States  (France  and  Luxemburg)  were  able  to  keep  the 
mandatory  bonus-malus  system,  which  benefited  consumers  in  those  countries.  A 
mandatory  and  transparent  bonus-malus  system  gives consumers  the  right  incentives  to 
adopt  better  driving  behaviour.  BEUC  consider  that  in  this  perspective,  the  current 
review opens a window of opportunity for the Commission to rectify this. 

5. Minimum amounts of cover 

All respondents are in favour of a minimum amount set at EU level and the same for all 
Member  States.  However,  a  substantial  increase  in  minimum  amounts  of  cover,  apart 
from periodic indexation, was not supported by the majority of stakeholders. Only a few 
stakeholders  would  like  to  see  minimum  amounts  increase  significantly,  either  for  all 
vehicles or some categories of vehicles.   

Some industry associations are in favour of higher amounts, which could result in higher 
premiums, and the differentiation between types of vehicles (electric bikes). The Council 

70 

 
 
of Bureaux supports a differentiation not only based in the type of vehicle that caused the 
accident but also take into account the type of vehicle that suffered the accident. 
Some  consumer  organisations  consider  that  minimum  amounts  of  cover  should  be  set 
higher,  but another  considers  that  it  should  remain the same.  Some  would  favour more 
frequent updating and stressed the importance of Member States being able to set higher 
amounts.  One  other  consumer  organisation  considers  that  differentiation  between  types 
of  vehicles  is  not  needed  if  the  minimum  amounts  are  sufficiently  high  and  only  one 
consumer  association  suggested  a  differentiation  of  the  minimum  amounts  for  trucks 
transporting  dangerous  goods.  One  consumer  organisation  considered  that  increase  of 
minimum  amounts  would  be  desirable  only  if  it  does  not  result  in  an  increase  of 
premiums for policyholders. 

One  Member  State  expressed  concerns  that  an  increase  in  minimum  amounts  could 
potentially  lead  to  increases  in  MTPL  insurance  premiums,  on  the  grounds  that  an 
increase of minimum amounts would lead to an increase in premiums as insurers would 
need to guarantee a higher level of coverage in case of accident.  

All stakeholder groups supported streamlining of the adaptation procedure providing for 
inflation. 

6. Technological evolution – autonomous vehicles 

Currently,  autonomous  and  semi-autonomous  vehicles  must  have  motor  insurance 
coverage in line  with  the MID, as must all traditional vehicles. A great majority of the 
respondents  of  all  categories  who  expressed  a  view  on  this  subject  prefer  autonomous 
vehicles to continue to be insured in the same manner as vehicles with drivers, under the 
MID. However, several questions were raised in this context, the main one being about 
the ultimate liability of the manufacturer and/or the software insurer (currently, a motor 
insurer can claim damages if a manufacturer or software insurer is liable for an accident 
caused  by  an  autonomous  vehicle,  after  having  settled  the  insurance  claim  itself). 
Furthermore, the question was raised of who has the final responsibility, the owner or the 
autonomous  vehicle.  A  few  respondents  consider  that  autonomous  cars  should  not  be 
insured  for  liability  in  the  same  manner  as  vehicles  with  drivers,  while  others  did  not 
have  an  opinion  on  this  topic.  One  concern  that  was  raised  was  that  the  transfer  of 
liability to the manufacturer could potentially harm innovation. 

7. Other issues covered by the Directive 

a)  Deemed insurance cover and insurance checks 

The  majority  of  respondents  support  systematic  insurance  checks  on  insurance  of 
vehicles  by  electronic  means.  Most  of  them  do  this  subject  to  compliance  with  data 
protection  provisions.  Some  respondents  were  against  this  measure.  The  main  reasons 
cited against  such  insurance  checks were  the fear of tracking citizens,  compliance with 
data  protection  provisions,  a  dubious  added-value  concerning  the  number  of  uninsured 
cars and the costs involved. Industry, consumer associations and Bureaux also supported 
systematic  checks  on  insurance  by  electronic  means  without  physically  stopping  the 
vehicle.   

71 

 
 
b)  Protection of visitors 

There  was  a  general  support  for  the  current  system  of  protection  of  visitors,  although 
some respondents disagreed but without giving reasons for their opinions.  

The majority of industry associations made a positive assessment of the system, but some 
of them raised issues regarding the efficiency (delays) and the lower level of protection 
compared  to  the  Green  Card  system  (which  does  not  cover  visitors).  A  consumer 
association  proposed  that  it  should  be  possible  to  sue  the  liable  insurer  in  front  of  the 
courts of the home country of the victims. The Council of Bureaux highlighted that the 
Directive  does  not  provide  for  any  guarantee  system  comparable  to  the  one  existing  in 
the Green Card System for travelling vehicles. Consequently, claims representatives have 
be sure of being reimbursed by an insurer before compensating a victim. Therefore, they 
usually await the advanced payment of the insurer before compensating the victim. In the 
interest of victims, it might be useful to consider the guaranteeing of compensations paid 
by claims representatives to victims. 

c)  Transfer of vehicles 

The question on transfer of vehicles was either not answered or not applicable to most of 
the  respondents.  A  few  mentioned  some  difficulties  without  specifying.  Some  industry 
associations  favoured  the  current  system,  but  some  of  them  were  very  critical  and 
proposed  to  delete  Article  15  of  MID.  This  was  also  the  position  of  the  Council  of 
Bureaux. One European insurance association made some proposals to amend and clarify 
the situation. 

Regarding  possible  simplifications,  a  few  respondents  proposed  European  transfer 
insurance  and  EU-wide  registration  plates  for  a  transfer.  One  respondent  raised  the 
concern  that  cross-border  crime  with  stolen  cars  could  be  encouraged  by  a  too  simple 
transfer procedure. 

C. Campaign of responses organised by the Motorsport Industry Association 

a) The following message from Chris Aylett, Chief Executive of the Motorsport Industry 
Association  appeared  during 
the  URL  https://www.the-
the  consultation  at 
mia.com/Vnuk-Update  

Vnuk Update - URGENT action needed by October 20th 

11 Oct 2017 

Your response to this real threat to motorsport throughout the EU is required by October 20th. Please take 

the time to read the information below and continue to the statement from Chris as he explains what the 

European Commission's Motor Insurance Directive could mean to motorsport. 

IMPORTANT LINKS: 

VNUK a danger to the future of motorsport - Your questions answered V4 

72 

 
 
 
MIA Response guidance to Vnuk MID EU Consultation V4 

MIA’s complete overview of the Vnuk issue V3 

Dear Motorsport friend and colleague, 

I do not apologise for the dramatic title as our industry and sport face a serious, immediate problem which 

you can help resolve. 

We have until October 20th to respond to this important EC consultation - follow the links above. If we 

fail to secure the amendment we seek then the likely outcome is that all motorsport activity, in 

every EU Member State, will cease. 

All involved in the business and organisation of European motorsport need to act NOW to overcome this 

genuine threat to our own future and that of our employees and sport, from the unintended consequences 

of action taken by the European Commission (EC). 

The Motorsport Industry Association (MIA), along with others including the UK Department for Transport, 

has been fighting to resolve this issue for more than two years, on behalf of our members and the wider EU 

motorsport community. Now, with your personal leadership and action, it is possible for us to resolve this, 

as I fully explain in the documents linked at the top and bottom of the page. 

In simple terms, the EC plans to issue a new Motor Insurance Directive, as a result of which all EU Member 

States must put into their National Law compulsory and unlimited third-party liability insurance to cover 

personal injury between motorsport competitors and car-to-car damage during any competition – from 

Formula One, Moto GP, World Rally to karting, historic and grass roots, whether regulated by the FIA or 

FIM or not. 

However such widespread unlimited new insurance is not currently, and, we understand, will not in the 

future be available - so motorsport will be unable to continue anywhere in the EU. Please read the summary 

if you wish to fully understand the serious nature of this problem. 

Please respond BY OCTOBER 20th to the EC Review Consultation - 

https://ec.europa.eu/info/consultations/finance-2017-motor-insurance_en 

By using the simple ‘MIA Response Guidelines’ which are here, this will take LESS THAN TEN MINUTES – a 

short time commitment to keep motorsport alive, and the jobs it supports, in place. 

It is most important that you estimate, if motorsport were to cease, how many jobs will be lost directly from 

your organisation and indirectly by your suppliers or the sport, as this significant economic impact will 

influence the European Commission. 

I am sharing this with my senior contacts across the European motorsport business community. 

May I ask that you help our community by sending a link to this page to your most influential motorsport 

business and sporting contacts, urgently please? We need all influential individuals, major teams, suppliers 

and employers in EU and UK motorsport to act - by working together we can change this. 

We must make the European Commission fully aware of the economic importance of motorsport and the 

employment which our sport and industry provides across the European Union. 

73 

 
 
An unimaginable situation yet true – fighting such battles for the industry was one of the reasons the MIA 

was originally created and is pro-actively supported by its members. 

If you have any questions or comments then please email me and I will respond immediately - as we must 

meet the deadline of October 20th. 

Thank you – your immediate help is invaluable and much appreciated 

Best regards 

Chris 

b) The following question and answer document of the Motorsport Industry Association 
on the ECJ's Vnuk judgement was retrieved at the following URL: https://www.the-
mia.com/assets/vnukadangertothefutureofmotorsport-yourquestionsansweredv4-1.pdf  

74 

 
 
 
 
 
75 

 
 
 
c)  The  following  guidance  by  the  Motorsport  Industry  Association  for  responses  to  the 
the  URL:  https://www.the-
public  consultation  on 
mia.com/assets/miaresponseguidancetovnukmideuconsultationv4.pdf  

the  MID  was  retrieved  at 

76 

 
 
 
77 

 
 
 
 
ANNEX 3: WHO IS AFFECTED AND WHY? 

1.  PRACTICAL IMPLICATIONS OF THE INITIATIVE 

The main stakeholders affected are as follows: 

1. Victims of motor accidents within the EU 

In  general,  the  proposed  package  will  improve  the  protection  of  victims  of  motor 
accidents within the EU.  

Victims  of  road  accidents  where  the  insurer  of  the  responsible  vehicle is  insolvent will 
under  the  preferred  option  be  protected  at  the  same  level  as  accidents  involving  an 
uninsured or untraceable vehicle. This will ensure that the victim obtains the same high 
level  of  protection  provided  in  the  MID  based  on  the  levels  of  compensation  in  the 
Member  State  of  the  accident,  in  any  event  at  least  that  of  the  EU-wide  minimum 
amounts laid down under Article 9 of the MID; Furthermore, the victims will be able to 
claim compensation in the Member State of their residence and obtain compensation by 
the designated national compensation fund.  

There  will  also  be  a  smaller  risk  of  becoming  a  victim  of  an  accident  involving  an 
uninsured  vehicle  from  another  Member  State,  as  the  level  of  cross-border  uninsured 
driving should decrease. Victims will be more often compensated by insurers and be less 
often required to obtain compensation from national compensation funds. 

Victims  will  also  benefit  from  uniformly  applied  minimum  amounts  of  cover  ensuring 
better  protection,  especially  if  they  are  victim  of  an  accident  in  a  Member  State  which 
currently has a lower level of cover.  

2. Policyholders of MPTL policies for motor vehicles 

Policyholders will benefit from reducing numbers of uninsured drivers if Member States 
choose  to  introduce  unobtrusive  insurance  checks.  A  reduction  of  the  number  of 
uninsured drivers could reduce the cost of claims paid by Compensation Bodies  due to 
uninsured  driving.  As  the  number  of  insured  drivers  should  increase,  this  should  over 
time lead to a reduction of premiums due to the fall in levies on insurance policies to find 
the Compensation Bodies.  

Policyholders residing in Member States which currently have lower minimum amounts 
of  cover  might  be  affected  by  a  slight  increase  in  premiums  due  to  the  alignment  of 
minimum  amount  across  Member  States.  However,  the  increase  should  be  limited  as 
minimum amounts of cover are only one factor among many others to determine motor 
premiums.  The  insurers  in  these  Member  States  must  have  factored  in  potential  high 

78 

 
 
 
 
 
  
level of compensation when travelling to another Member State, because in these cases, 
the minimum amounts applicable in visited Member States apply.  

Policyholders  relocating  across  borders  will  also  benefit  from  the  harmonisation  of 
claims  history  statements  and  the  non-discrimination  requirement  when  they  apply  for 
motor  insurance  in  another  Member  State.  They  are  expected  to  benefit  from  wider 
acceptance  of  claims  history  statements  and  to  obtain  the  same  treatment  as  domestic 
policyholders.  

3. Insurers providing MPTL insurance 

For  insurers,  introducing  a  system  that  mandates  the  "front-office"  and  "back-office" 
responsibility in case of insolvency of the insurer would be beneficial as it provides legal 
certainty on the initial and ultimate settlement of the claims, thus reducing the need for 
legal proceedings. It would also clarify to which compensation body they would need to 
make contributions to cover claims in case of their insolvency.  

This system will provide legal certainty for those insurers which operate across-borders 
and avoid "double contributions" to both home Member state and host Member State, as 
the  home  Member  State  is  identified  as  the  ultimate  responsible  body  for  claims 
following the insolvency of the insurer. 

For insurers, higher minimum amounts of cover in certain Member States would have a 
limited  effect,  given  the  small  amounts  of  increases,  and  the  fact  that  the  cost  of  most 
accidents  does  not  breach  the  current  minimum  amounts.  The  preferred  option  would 
entail limited upward changes in the level of minimum amounts of cover, in a limited set 
of Member States.  

As  regards  uninsured  driving,  the  actual  impact  on  insurers  would  depend  on  the 
reduction  of  uninsured  driving  due  to  the  optional  unobtrusive  checks.  Insurers  would 
benefit from lower contributions to national guarantee funds as there will be fewer claims 
of  uninsured  drivers.  In  addition  in  a  competitive  market  they  might  consider  lowering 
levels of premiums. 

On claims history statements, the proposed harmonisation of templates will most likely 
require  modifying  existing  templates.  This  will  most  likely  entail  only  limited  initial 
compliance  cost  as  the  Directive  already  today  requires  insurers  to  provide  a  claims 
history  statement  to  policyholders  if  they  move  to  another  insurer.  The  harmonised 
template would allow easier verification of the authenticity of claims history statements 
issued by a foreign insurer and reduce fraud, thus saving cost for insurers.  

4. National Compensation and Guarantee Bodies 

For  National  Compensation/Guarantee  Bodies,  introducing  a  system  that  mandates  the 
front  and  back-office  in  case  of  insolvency  of  the  insurer  would  be  beneficial  as  it 
provides legal certainty on the initial and ultimate settlement of the claims, reducing the 
need for legal proceedings.  

For  national  compensation  bodies,  higher  minimum  amounts  of  covers  would  have  a 
neutral  effect.  An  increase  in  minimum  amounts  could  increase  costs  of  claims  due  to 

79 

 
 
untraceable or uninsured vehicles. This would require increased contributions by insurers 
and/or  policyholders.  However,  this  would  only  affect  national  compensation  bodies 
where the current minimum amounts would require modifications and to a limited extent.  

As regards uninsured driving, the actual impact on national guarantee bodies depend on 
the reduction of uninsured driving  due  to  the unobtrusive checks. A smaller  number  of 
cases could lead to reductions in administrative costs. 

National compensation bodies are unaffected by the proposed measures on claims history 
statements.  

5. Member States  

As  regards  insolvency  of  an  insurer,  Member  States  will  have  to  designate  a  body 
responsible  for  the  initial  compensation  of  a  victim  resident  on  their  territory  ("front 
office")  and  a  body  with  ultimate  financial  responsibility  for  an  insolvent  insurer 
established in their territory ("back office").  

As  the  proposed  option  follows  broadly  the  principles  outlined  in  the  COB  voluntary 
agreements,  for  a  majority  of  Member  States  this  would  require  limited  operational 
changes  to  the  current  system.  However,  Member  States  which  are  not  part  of  the 
voluntary  agreements,  have  retracted  or  have  derogations  or  exceptions,  would  need  to 
adapt their rules to the new system.  

Member  States  should  ensure  that  the  body  of  the  Home  Member  State  is  sufficiently 
financed by industry contributions to cover the costs of claims in case of insolvency of 
the insurers which are under their supervision. This requires giving that body the power 
to oblige contributions from insurers. 

As  regards  uninsured  driving,  Member  States  will  be  allowed  to  conduct  unobtrusive 
checks of the insurance obligation for vehicles with a foreign number plate entering their 
territory.  Based  on  their  needs,  they  can  determine  the  extent  of  the  checks,  and 
determine  with  which  Member  States  they  would  set  up  a  system  of  exchange  of 
information.  This  allows  Member  States  to  address  uninsured  driving  and  at  the  same 
time limit the costs of setting the system of checks and exchange of information. It can be 
expected  that  they  would  most  likely  set  up  exchange  of  information  with  bordering 
countries. 

Member States would be unaffected by the changes in minimum amounts.    

Member States remain unaffected by changes on claims history.  

80 

 
 
 
 
2.  SUMMARY OF COSTS AND BENEFITS 

I. Overview of Benefits (total for all provisions) – Preferred Option 

Description 

Amount 

Comments 

Direct benefits 

 EUR 500 000 – 2.5 million69 annually   Avoids  potential  litigation  over  both  initial 

and final payment. 

initial 
Guaranteed 
a 
of 
compensation 
victim 
of 
case 
insolvency of an insurer 

in 

Avoids  delays  of  compensation  of  victims 
due to litigation. Compensation in line with 
the time limitations set out in the MID. 

Ensures full compensation of victims in line 
with  the  requirements  set  out  in  the  MID.   
Avoids partial or no compensations. 

Accounts for public costs of trial as well as 
costs of litigation to parties.  

Setting  equal  amounts  of  minimum  cover 
will  not  gain  any  direct  cost-savings. 
Policyholders  /  victims  will  benefit  in  the 
case  of  accidents  where  the  total  amounts 
would currently not be covered.70  

The 
foreseen  amendment  will  merely 
remove the current ban on insurance checks. 
As  such,  it  remains  unclear  how  many 
Member States will implement such checks. 
The figures are based on estimates of claims 
in  relation  to  uninsured  driving.  Given  that 
not  all  Member  States  will  impose  checks 

Equal minimum 
amounts of cover 

Not quantifiable   

Allow  non-obstructive 
motor insurance checks 

Potentially  EUR  835  –  870  million 
annually (upper bound)71  

69 Based on 5-year average number of insurer insolvencies (approximately one per year), available data on 
reimbursed sums in past insolvency cases (since 1998) and European Commission estimates on costs 
of  litigation.  Costs  considered  include:  court  fees,  lawyer’s  fees,  bailiffs’  fees,  expert  fees  and 
(potential) translation fees.  

70  Quantification  of  this  effect  is  not  possible  due  to  lack  of  micro  data  on  the  frequency  of  cases  and 

amounts concerned in the respective Member States.    

71  Based  on  EREG  and  Council  of  Bureaux  estimates  in  2011;  The  benefit  will  depend  heavily  on  the 
amount of Member States adopting such checks, the amount of cross-border traffic in these Member 
States and the effectiveness of the checks imposed.    

81 

 
 
 
 
                                                            
EUR 4.2– 12.7 million72  

and  that  such  checks  will  not  be  able  to 
capture  all  cases  of  uninsured  driving,  a 
figure  in  the  range  of  EUR  250  –  500 
million  appears  more  realistic  in  practice 
(possibly  to  increase  over  time  as  more 
Member States adopt checks).   

Policyholders  moving  to  another  Member 
State  will  benefit  from  lower  premiums  as 
there will be no discriminatory treatment of 
claims  histories.  The  figure  assumes  that 
10%  of  drivers  are  currently  affected  by 
discriminatory treatment.      

Non-discrimination 
requirement 
treatment 
history 

for 

of 

the 
claims 

Allow  non-obstructive 
motor insurance checks 

Not quantifiable   

Indirect benefits 

Policyholders  will  ultimately  benefit 
in 
terms of lower premiums as insurers pass on 
savings  from  fewer  uninsured  claims.  The 
pass-on  rate  will  crucially  depend  on  the 
competition  of  insurers  in  the  respective 
Member  State  and  the  extent  to  which 
Member States actually impose such checks. 
There 
to 
estimate 
reasonable 
accuracy.  

insufficient  data  available 
this 

effect  with 

is 

II. Overview of costs – Preferred option 

Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off  Recurrent 

out 
on 

Set 
rules 
initial 
compensat
ion 
of 
victims 
and 
ultimate 

Direct costs 

Minimal 
of 
increase 
costs  due  to 
annual 
contributions 
to 
national 
guarantee 

The  rules 
will  have 
cost 
implicatio
for 
ns 
national 
guarantee 

Minimal 
additional 
costs due to 
compensati
ons  in  case 
of  
insolvency 

72  This  estimate  is  based  on  the  EU  average  premium  paid  (EUR  250  –  Source:  Insurance  Europe),  the 
amount  of  people  of  working  age  moving  to  another  Member  State  per  year  (1,692,000  in  2014  – 
Source:  ESTAT)  while  assuming  that  20%  of  people  are  affected  by  discriminatory  treatment  of 
claims history and that premiums will be 10-30% higher compared to cases where the claims history is 
effectively taken into account.    

82 

 
 
 
 
 
 
 
                                                            
responsibi
lity  for  the 
claim 

Set  equal 
minimum 
amounts 
of cover  

Indirect costs 

Direct costs 

Indirect costs 

Allow 
non-
obstructiv

Direct costs 

funds. 

of insurer  

funds  that 
will  now 
have 
to 
reimburse 
victims 

Affected 
Member 
States will 
be 
required 
to 
increase 
minimum 
amounts 
and 
related 
national 
legislation 

funds 
to 

In  affected 
Member 
States, 
compensati
on 
have 
reimburse 
victims 
in 
accordance 
with 
minimum 
amounts 

Member 
States 
opting 

to 

The 
operation 
of 

in 

Possible 
increase 
premiums 
to 
due 
increase 
of 
contributions 
of  insurers  to 
compensatio
n bodies 

Possible 
small 
increase 
in 
premiums  in 
a  minority  of 
Member 
States 

in 

Insurers 
Member 
States 
affected  by 
an 
increase 
in  minimum 
cover  will 
face  have  to 
recalculate 
insurance 
premiums   

83 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
be 

introduce 
checks 
will 
required 
to  set  up 
respective 
systems 
and 
correspon
ding costs  

face 

insurance 
check 
systems 
will  require 
maintenanc
e, 
replacemen
ts 
and 
upgrades 
on a regular 
basis  

e  motor 
insurance 
checks.  

Indirect costs 

Direct costs 

Impose  a 
non-
discrimina
tion clause 
for 
the 
treatment 
of  claims 
history 
statements 
and 
a 
disclosure 
requireme
nt 

Indirect costs 

EUR  4.0-8.1 
million73  

Adaptation 
of  templates 
the 
to 
harmonised 
format; 
information 
to 
policyholder
s  about  their 
rights 

73  This  estimate  assumes  that  the  change  of  template  would  require,  on  average,  the  equivalent  of  1-2 
weeks FTE per insurer in order to carry out the necessary changes to IT systems (assuming an average 
annual salary of EUR 75,000),  plus and additional EUR 2,500  – 5,000 to cover other administrative 
and legal costs. 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
3.   SUMMARY OF QUALITATIVE ASSESSMENT OF MACRO-ECONOMIC IMPACTS  

The table below summarizes the macro-economic the different policy options.  

Table 3: Summary of qualitative assessment of macro-economic impacts 

Topic 

Expected  macro-
impact 

High/Medium/Lo
w 

Impact drivers 

Rationale/assessment 

Insolvency 

Low 

Number of insolvency cases of 
MTPL  insurers  (domestic  and 
cross-border) 

of 

frequency 

cross-border 
The 
insolvencies  of  insurers  will  not  be 
impacted  by  this  initiative,  which 
only  deals  with  consequences  of 
largest 
insolvency.  Only 
the 
insurance 
insolvencies  worldwide 
(e.g.  AIG)  have  macro-economic 
significance. 

Minimum  amounts 
of cover 

Low 

  minimum 
MS  with  lower 
amounts  are  required  to  align 
upward  

Possible  impact  on  level  of 
premiums in those MS 

Impact  on  premiums  is  very  limited, 
and  unlikely  to  have  any  impact  on 
purchasing  power  or  consumption  in 
those Member States concerned. 

Claims history 

Low 

Uninsured driving 

Low 

Amount  of  persons  moving 
across-border  requiring  new 
MTPL insurance 

Compliance cost for insurers 

that  problems  with 
No  evidence 
MTPL 
insurance  have  had  any 
impact  on  cross-border  mobility  of 
individuals. 

Amount  of  uninsured  drivers: 
level  and 
both  at  national 
cross-border level 

Amount  of  uninsured  driving  is  very 
distinct  by  Member  State.  Some 
Member States 

Cost of claims due to accidents 
with  uninsured  driver  covered 
by compensation bodies 

Costs  of  claims  from  cross-border 
cases  estimated  at  EUR  830-870 
Million per year  

Contributions  from  insurers  to 
compensation  funds  to  cover 
the  cost  of  claims  due 
to 
uninsured drivers 

Price  of  MTPL  insurance  for 
all  drivers  to  cover  the  cost  of 
claims 

Cost  of  claims  affects  contributions 
of insurers to compensation funds 

Contributions  on  claims  due 
to 
uninsured  driving  affect  the  price  of 
motor insurance.  

85 

 
 
 
 
 
 
 
86 

 
 
 
 
ANNEX 4: MARKET DATA DESCRIPTION AND ANALYTIC MODELS USED 

TO PREPARE THIS IMPACT ASSESSMENT. 

1. Overview of road fatalities in the EU 

The data from the CARE annual report of 2016 show that there is a downward evolution 
of accidents and fatalities which stabilised in 2014. It also shows a relationship between 
road  accidents,  fatalities  and  injuries.    In  2014  there  were  more  than  1  million  road 
accidents in the EU and more than 25,000 road fatalities and approximately 1.4 million 
injured.  

Figure 1.1:  Annual number of fatalities, injury accidents and injured people in the 
EU, 2005-2014 

CARE 

Source: 
at: 
https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/statistics/dacota/asr20
16.pdf 

available 

Annual 

Report 

2016, 

The  figure  below  shows  the  split  in  fatalities  by  mode  of  transport.  It  shows  that  the 
majority  of  fatal  road  accidents  involve  cars  or  taxis,  pedestrians  and  motorcycles  and 
pedal cyclists.  They are followed in total number of fatalities by accidents with lorries or 
heavy goods vehicles, buses or coaches as well as agricultural tractors.  

87 

 
 
 
 
 
 
 
Figure 1.2: Fatalities by type of area and mode of transport in the EU, 2014 

CARE 

Source: 
at: 
https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/statistics/dacota/asr20
16.pdf 

available 

Annual 

Report 

2016, 

Not only are there differences in the fatalities by type of vehicle, there are also changes in 
fatalities by types of vehicle over time as shown in the figure below. 

Figure  1.3:  Number  of  fatalities  in  accidents  involving  Heavy  Goods  Vehicles  and 
buses or coaches and all road fatalities, EU, 2005-2014 

88 

 
 
 
 
  
Source:  CARE 
at: 
available 
https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/statistics/dacota/bfs20
16_hgvs.pdf 

in  May 

database, 

available 

2016, 

data 

The figure 1.3 presents the number of people killed over the last ten years in accidents 
involving  buses and coaches. The number of fatalities in  these accidents  in the EU fell 
from over 1,333 in 2005 to 751 in 2014, a fall of almost 50%.  Both fatalities of accidents 
with  heavy  goods  vehicles  and  buses  or  coaches  have  fallen  in  parallel,  with 
approximately five times as many people fatalities per year in accidents involving Heavy 
Goods Vehicles as in accidents involving buses or coaches. 

Figure 1.4: Percentage of fatalities in accidents involving Heavy Goods Vehicles and 
buses or coaches of all road fatalities, EU, 2005-2014 

89 

 
 
 
at: 
available 
Source:  CARE 
https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/statistics/dacota/bfs20
16_hgvs.pdf 

in  May 

database, 

available 

2016, 

data 

The figure above present the percentage of fatalities in accidents involving Heavy Goods 
Vehicles  (HGV)  and  buses  or  coaches  of  all  road  fatalities.  Whereas  the  number  of 
fatalities in accidents involving HGVs and buses or coaches fell by nearly 50% between 
2005  and  2014,  the  percentage  of  fatalities  in  accidents  involving  HGVs  and  buses  or 
coaches did not decrease considerably. 

2.  Motor Insurance Market: Key data 

Figure 2.1: Number of domestic insurance companies in the EU 

90 

 
 
 
 
 
 
 
1.250

1.100

950

800

650

500

4%

2%

0%

-2%

-4%

-6%

-8%

-10%

2005

2006

2007

2008

2009

2010

2011

2012

2013

Number of domestic companies

Growth rate

Source: Insurance Europe, European Motor Insurance Markets, November 2015 

In total there were 1026 insurance companies in the EU.  

Figure 2.2: Number of motor vehicles in the EU and growth rate 

400

300

s
n
o

i
l
l
i

m

l

,
s
e
c
h
e
v

i

200

f
o

r
e
b
m
u
N

100

6%

3%

r
a
t
e
,

%

G
r
o
w
t
h

0%

2004

2005

2007
2006
Number of vehicles

2008

2009

2010

2011
Growth rate

2012

2013

Source: Insurance Europe, European Motor Insurance Markets, November 2015 

91 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 2.3: MTPL premiums as proportion of non-life market 

35%

33,7% 

31,8% 

31,3% 

30%

25%

29,8% 

29,4% 

29,1% 

28,6% 

28,0%  28,1% 

27.4% 

27,4% 

27,3% 

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

3. MTPL motor insurance: key data 

Figure 3.1 : Evolution of average MTPL premiums (in EUR) (2004-2014) 

300

200

100

0

20%

10%

0%

-10%

-20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Average MTPL premiums Growth rate

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

92 

 
 
 
 
 
 
 
 
Figure 3.2: average MTPL premiums by Member State 

600

500

400

300

200

100

0

IT CH BE DE GR NL ES FR FI

SI HR PT PL TR CZ EE HU LV

2012,(€) 

2013,(€) 

2014,(€) 

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

Figure 3.3: Average MTPL premiums by Member State PPP adjusted. 

510 

439 

600

500

400

300

200

100

0

309 

308  252 

237 

192  178 

153 

157 

143  136 

94 

106  105  99 

62  49 

CH IT NL BE GR DE HR ES FI

SI

FR PT PL TR CZ EE LV HU

2011

2012

Source: Insurance Europe, European Motor Insurance Markets, November 2015 

93 

 
 
 
 
 
 
 
 
 
 
Figures 3.1, 3.2, and 3.3 above provides an overview of the average MTPL premiums in 
the  EU.  While  the  EU  average  is  around  250  euros,  there  are  considerable  difference 
between Member States. Figure 5 shows that lowest premiums are observed in Hungary, 
set  at  EUR  49  in  2013  compared  to  Italy  where  MTPL  insure  amount  EUR  439  in 
purchasing power parity.  

Taking into account that in some Member States (BE, DE, DK, FI, IE, LU, SE, SK, UK) 
the minimum amount of cover considerably higher than those foreseen in the directive, 
there does not seem to be a direct correlation between the minimum amount of cover and 
MTPL premiums.  

4. Costs of MTPL Claims 

Figure 4.1: average MTPL claims costs, 2005-2014 

3.200

3.000

2.800

2.600

2.400

2.200

6%

4%

2%

0%

-2%

-4%

-6%

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Average MTPL claim cost (€)  Growth rate (%)

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

As  shown  in  the  figure  above,  the  cost  of  claims  has  gradually  increased  in  the  period 
205-2013  reaching  EUR  3.200.  Following  a  steep  hike  between  2010  and  2012  the 
overall cost of claims has been stabilised since 2012.  

However  as  is  the  case  with  premiums,  there  are  considerable  differences  between 
Member States as regards the cost of claims. While in a number of Member States (HU, 
PT, PL, SK,  EE, CZ), the average cost of MTPL claims is around EUR 1000, in  some 
others, (DE, BE, NL, FI, IT) is beyond EUR 3000. In Italy, the average cost of MTPL 
claims is EUR 5000.  

94 

 
 
 
 
 
 
 
Figure 4.2  average MTPL claims costs, by Member State, 2012-2014 

6.000

5.000

4.000

3.000

2.000

1.000

0

T F

I

I

L
N

R
F

E
B

E
D

I

O S
N

T
A

Z
C

U
H

R
G

E
E

K
S

L
P

R
T

T
P

R
H

2012, (€) 

2013, (€) 

2014, (€) 

Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

Figure 4.3: average MTPL claims costs, by Member State, PPP adjusted 

95 

 
 
 
 
 
 
 
 
 
 
6.000

5.000

4.000

3.000

2.000

1.000

0

T

I

L
N

I

R F
F

E
B

U
H

I

Z S
C

E
D

R
T

L
P

K
S

O
N

T
A

E
E

R
H

R
G

T
P

2012, (€) 

2013, (€) 

2014, (€) 

Source:  European  Motor  Insurance  Markets  Addendum,  Insurance  Europe,  June 
2016 

Impact of changes of minimum amounts of cover 

Table 4: Current levels of minimum amount of cover (2015 data *) 

Personal Injuries (in EUR) 

Material Damage (in EUR) 

Country 

Per person 

Per claim 

Per person 

Per Claim 

111.802.803 

1.294.762* 

1.022.584 
1.294.762* 

1.000.000 

BE 
BG 
CZ 
DK* 
DE 
EE 
IE 
EL 
ES 
FR 
HR* 
IT 
CY* 
LT 
LV 
LU 
HU 

Unlimited 
5,112, 919 

15.281.092* 
7.500.000 
5.600.000 
unlimited 

70.000.000 
unlimited 
5.603.251* 
5.000.000 
33.540.000* 
5.000.000 
5.000.000 
unlimited 
5.123.771* 

96 

111.802.803 
1.022.584 

3.083.027* 
1.120.000 
1.200.000 
1.120.000 
1.000.000 
15.000.000 
1.120.000 
1.120.650* 
1.000.000 
1.120.000* 
1.000.000 
1.000.000 
unlimited 
1.601.178* 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MT 
NL 
AT 
PL 
PT 
RO 
SK 
SI 
FI 
SE* 
UK 

5.000.000 
5.600.000 
5.800.000 
5.000.000 
5.000.000 
5.000.000 
5.000.000 
5.000.000 
unlimited 
32.342.921* 
unlimited 

1.000.000 
1.120.000 
1.200.000 
1.000.000 
1.000.000 
1.000.000 
1.000.000 
1.000.000 
3.300.000 
32.342.921* 
1.442.880 

Source: CoB 2015* actual levels of minimum amount could be different due to an update 
of  minimum  amounts  in  2016  following  a  Commission  Communication  (COM/2016/0246 
final)  and changes in exchange rate not reflected in this table.  

Table 5: Estimated changes for personal injuries by Member State (based on 2015 levels*) 

Personal Injuries  

current applicable amount (in EUR) 

New amount of cover (in EUR) 

Country 

Per person 

Per claim 

Per person 

MID amount 

1,220,000  

6,070,000  

1,220,000  

BE 

BG 

CZ 

DK* 

DE 

EE 

IE 

EL 

ES 

FR 

HR* 

1,022,584  

1,294,762  

Unlimited 

5,112,919  

1,220,000  

1294762 

15,281,092  

7,500,000  

5,600,000  

unlimited 

1,000,000  

1,220,000  

70,000,000  

unlimited 

5,603,251  

97 

Per claim 

6,070,000  

Unlimited 

6,070,000  

15,281,092  

7,500,000  

6,070,000  

unlimited 

70,000,000  

unlimited 

6,070,000  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
IT 

CY* 

LT 

LV 

LU 

HU 

MT 

NL 

AT 

PL 

PT 

RO 

SK 

SI 

FI 

SE* 

UK 

5,000,000  

33,540,000  

5,000,000  

5,000,000  

unlimited 

5,123,771  

5,000,000  

5,600,000  

5,800,000  

5,000,000  

5,000,000  

5,000,000  

5,000,000  

5,000,000  

unlimited 

32,342,921  

unlimited 

6,070,000  

33540000 

6,070,000  

6,070,000  

unlimited 

6,070,000  

6,070,000  

6,070,000  

6,070,000  

6,070,000  

6,070,000  

6,070,000  

6,070,000  

6,070,000  

unlimited 

32,342,921  

unlimited 

Source:  CoB  publication  from  2015  and  own  calculations.  (*)    actual  changes  will  be 
smaller as minimum amounts were updated for inflation in the course of 2016  

98 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
Table 6: Estimated changes for material damage by Member State (Based on 2015 levels *) 

Material Damage 

Current amount of cover (in EUR) 

New amount of cover (in EUR) 

Country 

Per person 

MID amount 

- 

Per Claim 

1,220,000  

Per person 

Per claim 

1,220,000  

BE 

BG 

CZ 

DK* 

DE 

EE 

IE 

EL 

ES 

FR 

HR* 

IT 

CY* 

LT 

LV 

LU 

HU 

MT 

NL 

AT 

PL 

PT 

RO 

SK 

SI 

FI 

SE* 

UK 

111,802,803  

111,802,803  

111,802,803  

111802803 

1022584 

0  

1,220,000  

1,294,762  

1,294,762  

3,083,027  

1,120,000  

1,200,000  

1,120,000  

1,000,000  

15,000,000  

1,120,000  

1,120,650  

1,000,000  

1,120,000  

1,000,000  

1,000,000  

unlimited 

1,601,178  

1,000,000  

1,120,000  

1,200,000  

1,000,000  

1,000,000  

1,000,000  

1,000,000  

1,000,000  

3,300,000  

32,342,921  

1,442,880  

0  

3,083,027  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

15,000,000  

1,120,000  

1,220,000  

1,220,000  

1,120,000  

1,220,000  

1,220,000  

unlimited 

1,601,178  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

1,220,000  

3,300,000  

32,342,921  

1,442,880  

Source:  CoB  publication  from  2015  and  own  calculations.  (*)  Actual  changes  will  be 
lower  for  some  Member  States  as  minimum  amounts  were  updated  for  inflation  in  the 
course of 2016 following a Commission Communication (COM/2016/0246 final). 

99 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
ANNEX 5:  GLOSSARY OF TERMS AND ABBREVIATIONS. 

Green Card 

Guarantee Funds 

Compensation 
Bodies 

Green Card System  The Green Card System is a protection mechanism for victims of cross-
border road traffic accidents. It facilitates the flow of cross-border road 
traffic in Europe and guarantees the compensation of domestic victims of 
accidents caused by foreign motorists in guaranteeing sufficient third party 
liability of the latter. 
The Green Card is an international certificate of insurance issued under 
the authority of the National Bureau. It provides a guarantee for the visited 
country that the insurer of the vehicle's country of origin will reimburse the 
victim's damage in accordance with the rules applicable in the visited 
country. If the insurer, for whatever reason, does not reimburse the 
damage, the National Bureau under which authority the Green Card has 
been issued will guarantee the compensation. Motorists can obtain a 
Green Card from the insurer that has issued their motor insurance policy. 
The format of the Green Card is determined by the United Nations 
Economic Commission for Europe (UNECE), on the basis of a proposal of 
the Council of Bureaux. 
Guarantee Funds have been established in execution of the 2nd 
European Motor Insurance Directive and must provide compensation to 
victims of accidents caused by unidentified or uninsured vehicles. The 
conditions for intervention can be found in Article 10 of the Codified Motor 
Insurance Directive. Member States are free to confine other tasks to 
Guarantee Funds on the national territory (e.g. intervention in case of 
insolvency of insurers). 
Compensation Bodies can be considered as a sort of safety net in certain 
cases where insurers or claims representatives do not respect the 
obligations under the Motor Insurance Directive or where an accident is 
caused by an unidentified or uninsured vehicle in another Member State 
than the victim's Member State of residence. In case an insurer has not 
appointed a claims representative or when the insurer or claims 
representative does not formulate a reasoned offer or reasoned reply 
within the required time limit, the victim can address a claim to the 
Compensation Body of their Member State of residence. The same body 
can be appealed to in case the victim has suffered an accident in another 
Member State, caused by an unidentified or uninsured vehicle. 
in order to allow the victim to identify the right body to turn to, the Motor 
Insurance Directive requires the EEA Member States to establish 
Information Centres, who must be able to provide the victim with, amongst 
others, the name of the insurer covering the vehicle which has caused an 
accident and the claims representative appointed by that insurer in the 
victim's Member State of residence 
The Council of Bureaux offers secretarial services to Compensation 
Bodies, Guarantee Funds and Information Centres in order to allow the 
necessary cooperation and to safeguard the proper application of the 
Motor Insurance Directives. The CoB is merely a technical organisation 
envisaging a satisfactory level of protection to victims of cross-border road 
traffic accidents. 
MTPL Motor third-party liability, refers to a person’s legal liability for the 
bodily injury and/or property damage sustained by another as the result of 
a motor vehicle-related accident. The EU Motor Insurance Directive 
mandates that all motor vehicles are covered by insurance for third-party 
liability. 

Council of Bureaux 
(CoB) 

Motor Third- Party 
liability (MTPL) 

Information centres 

Comprehensive 
cover 

A motor insurance policy that includes both MTPL and damage cover. 

100 

 
 
 
 
Personal injury 

  Physical harm to one’s person. 

Material damage 

All property-related damage losses covered by a motor insurance policy. 
This includes the following: Property Damage, Comprehensive damage, 
Collision damage, Fire/Theft Combined Additional Coverage, Rental 
Compensation, or Uninsured Motorist Property Damage. 

Green Card Bureau  Green Card Bureaux are bodies operating with the recognition and 

approval of the government and the activities of the Green Card Bureaux 
and are established by law or regulation in each of the countries 
participating in the system. Each Green Card Bureau has two functions: 

    As a "Bureau of the country of the accident", it has responsibility in 
accordance with national legal provisions for Compulsory Third Party 
Motor Insurance for the handling and settlement of claims arising from 
accidents caused by visiting motorists. 
    As a "Guaranteeing Bureau" it guarantees certificates of Motor 
Insurance - ("Green Cards") which are issued by its member insurance 
companies to their policyholders. 
Freedom of Establishment. Exercise of the right of freedom of 
establishment by an insurance undertaking by either setting up a base 
office or by opening a branch 

Freedom to provide services. Exercise of the right to provide insurance 
services in other than home Member State by an undertaking on the basis 
of an EU wide license. The undertaking is not obliged to set up an office in 
the host Member State, but for motor third party liability insurance, it must 
appoint a representative and become a member of the local bureau and 
pay the levies towards the Article 10 compensation body. 
Council of Bureaux. A body coordinating the activities of the different 
National Motor Insurers' Bureaux that are members of the Green Card 
System and acting as a Secretariat for the bodies applying the European 
Motor Insurance Directives: Compensation Bodies, Guarantee Funds and 
Information Centres. 
Association of British Insurers 

FoE 

FoS 

CoB 

ABI 

UNESPA 

Spanish Association of Insurance and Reinsurance Institutions 

AMICE 

Association of mutual insurers and insurance cooperatives in Europe 

ECF 

European cyclists federation  

BEUC  

The European consumer organisation 

101 

 
 
 
 
 
GDV  

German Insurers Association 

FIA 

Federation Internationale d'automobile 

ANNEX  6: VOLUNTARY  INDUSTRY CODE OF CONDUCT FOR CLAIMS HISTORY 

STATEMENTS 

In  2013,  Insurance  Europe  adopted  voluntary  guidelines  on  the  information  on  claims 
history  statements  which  are  reproduced  below.    These  guidelines  are  very  brief,  (less 
than one page) on what information should be included. The guidelines do not set out a 
format  for  the  claims  history  statement  and  do  not  indicate  how  the  claim  history 
statement  should.  They does  not  set  out  how insurers  can  verify  the  authenticity  of  the 
claims history statement which is a concern for cross-border situations. Furthermore, the 
guidelines  are  not  fully  in  compliance  with  the  obligations  of  the  Motor  Insurance 
Directive.    In  particular,  the  Directive  mandates  insurer  to  provide  a  claims  history 
statement, while the guidelines suggest this is only a voluntary obligation.  

Consequently  the  current  guidelines  seem  insufficient  to  deal  with  the  issue  of  claims 
history in cross-border cases.   

Insurance Europe Guidelines on information for motor insurance 
claims history declarations for cross-border use  

 

 

 

 

 

These guidelines should be used in the framework of the Single Market to facilitate the 
circulation  of  information  on  claims  history  and  assessment  of  bonus/malus  by 
insurers operating on two distinct national markets.  

These guidelines should be adapted  to the national regulations in place and  could be 
applied by insurance companies on a voluntary basis and on request of policyholders 
for cross-border use only.  

Insurance  companies  should  be  ready  to  issue,  on  a  voluntary  basis,  claims 
history statements on request of policyholders for cross-border use.  

Insurance  companies  should  undertake  simple  English  translations  of  claims 
history statements for cross-border use free of charge for policyholders.  

Insurance  companies  should  incorporate a set  of  information  on  their claims 
history  statements  to  facilitate  exchange  of  information.  The  statements 
could thus incorporate the following information:  

  name of the insurance company establishing the declaration  

  date of issue of the declaration  

102 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

identification of the policyholder  

  address of the policyholder  

  date of birth of the policyholder  

  date of inception and date of expiration of cover (period of insurance)  

  number of declared liability claims during the past five years of cover (or 

at least during the period of insurance) and dates of the accidents  

Source: Insurance Europe, available at: 
https://www.insuranceeurope.eu/sites/default/files/attachments/Guidelines%20on%20inf
ormation%20for%20motor%20insurance%20claims%20history%20declarations%20for
%20cross-border%20use.pdf 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
ANNEX 7: EVALUATION REPORT 

 1. 

INTRODUCTION  

This  report  expresses  the  findings  and  conclusions  of  the  evaluation  of  the  EU  Motor 
Insurance  Directive  (hereafter  the  Directive,  or  MID)  2009/103/EC,  which  was  carried 
out in 2017, including a public consultation from July to October of that year.  

The evaluation assesses whether the Directive remains fit for purpose on the basis of five 
criteria: effectiveness, efficiency, coherence, relevance and EU added value. It also aims 
to identify excessive regulatory burdens, overlaps, gaps, inconsistencies and/or obsolete 
elements which may have developed over time. Finally, it determines whether there is a 
need  for  further  action  at  EU  level  to  improve  the  Directive's  implementation  and 
application or update its provisions. 

It  should  be  read  in  conjunction  with  the  Impact  Assessment  report  concerning  certain 
proposed  amendments  to  that  Directive  (of  which  it  forms  an  annex).  The  specific 
aspects of the Directive on which it has been decided to work on proposed amendments 
are discussed in more detail in the Impact Assessment, but are also covered in this report, 
so that it is complete and can be read independently (however, at the price of significant 
duplication). 

2.  BACKGROUND TO THE INTERVENTION 

2.1  

Intervention logic  

The EU motor insurance policy has a twofold objective: first of all, it seeks to ensure a 
high level of protection of victims of traffic accidents; second it seeks to ensure the free 
movement of persons and goods (in motor vehicles) across the EU. 

Insurance against civil liability in respect of the use of motor vehicles (motor insurance) 
is of special importance for European citizens, in particular for victims of an accident but 
also  for  policyholders,  to  reinforce  and  consolidate  the  internal  market  in  motor 
insurance.  

The Directive ensures that victims of a motor accident across the EU, who might suffer 
personal injury or material damage, are quickly compensated, with specific safeguards to 
ensure  that  victims  seeking  compensation  are  not  obliged  to  have  recourse  to  judicial 
proceedings. Therefore, to protect victims of traffic accidents, each Member State must 
take all appropriate measures to ensure that civil liability in respect of the use of vehicles 
normally based in its territory is covered by insurance. The extent of the liability covered 
and the terms and conditions of the insurance cover are prescribed by the Directive.   

Motor insurance also has an impact on the free movement of persons and vehicles. For 
policyholders, owners of a car which has the potential to cause an accident, the directive 
ensures that their civil liability against third parties is covered when they circulate freely 
and  on  the  basis  of  a  single  premium  throughout  the  EU.  Previously,  under  the 
international Green Card system, motor vehicles were stopped at borders to verify if they 
are  covered  by  third  party  liability  insurance,  as  proven  by  a  Green  Card.  The  MID 
abolishes  these  obstructive  insurance  checks  on  borders  and  allows  for  the  free 

104 

 
 
circulation of  vehicles within the  EU  on  the  base  of  a  single  third  party  liability  motor 
insurance obtained in the Member State where the vehicle is normally based.  

2.2 

History of the Motor Insurance Directive 

The  EU  Motor  Insurance  Directive of  2009  is  a  consolidation  of  a  number  of  previous 
versions of the MID, the first of which  dates from 1972. The MID, in its current form, 
protects victims of road accidents in EU Member States other than that of their residence, 
or  domestic  victims  of  accidents  caused  by  a  driver  from  another  Member  State.  It 
applies the international Green Card system in the EU (see Box 5), but goes beyond it. 
Under  the  MID,  subscribers  of  compulsory  Motor  Third  Party  Liability  (MTPL) 
insurance policies in the whole EU are covered for motoring throughout the EU on the 
basis of a single premium. 

Specifically, the MID: 

• 

• 
• 

• 
• 

• 

• 

• 

Requires  that  all  motor  vehicles  in  the  EU  be  covered  by  compulsory  MTPL 
insurance (including all passengers and throughout the EU); 
Abolishes border checks on insurance; 
Prescribes  minimum  third-party  liability  insurance  cover  in  EU  (more  detail  on 
this below); 
Specifies exempt persons and authorities/bodies responsible for compensation; 
Introduces  a  mechanism  to  compensate  local  victims  of  accidents  caused  by 
vehicles from another EU country; 
Obliges the creation of national motor insurance  guarantee funds to compensate 
victims of accidents caused by uninsured or untraceable drivers; 
Requires the quick settlement of claims arising from accidents occurring outside 
the victim’s EU country of residence (so-called “visiting victims”); 
Entitles policyholders to request a statement concerning the claims (or absence of 
claims)  involving  their  vehicle(s)  during  (at  least)  the  five  years  preceding  the 
contract. The insurer must provide this statement within 15 days. This is to enable 
policyholders  to  switch  more  easily  from  one  insurer  to  another,  both 
domestically and cross-border. 

The MID does not regulate: 

• 

• 

Issues  of  civil  liability  and  the  calculation  of  compensation  awards  –  these  are 
decided by individual EU countries.  
So-called  “comprehensive  cover”  (for  physical  injury  of  the  driver,  material 
damage to vehicles, vehicle theft, etc.).  

Box 5: International Green Card system and EU Motor Insurance Legislation 

The  Green  Card  is  an  international  certificate  of  third  party  liability  insurance  that  makes  it 
possible  for  travellers  to  cross  borders  without  having  to  buy  supplementary  insurance.  The 
system is run by a Council of Bureaux and was set up in 1949 under the auspices of the United 
Nations Economic Commission for Europe (UNECE). There are three categories of Green Card 
Members: EEA Member States, Members under section III of the Internal Regulations (Andorra, 
Serbia and Switzerland) and standard Green Card Members. Vehicles from EEA Member States 
and  Section  III  States  can  travel  freely  between  the  relevant  territories  even  without  the  Green 
Card as the number plate of such Member State is presumed proof of insurance.  

105 

 
 
 
 
The evolution of EU motor insurance legislation involved successive adoption of five Directives, 
continuously improving the legal framework and strengthening the protection of victims of traffic 
accidents.  The  first  Directive  of  1972  set  out  the  obligation  for  all  vehicles  to  be  covered  by  a 
MTPL insurance, mandated abolition of border checks on motor insurance and made it possible 
for  Member  States  to  derogate  some  natural  or  legal  persons'  vehicles  or  certain  types  of 
vehicles. The second Directive of 1983 set for the first time minimum amounts of cover, obliged 
Member States to set up compensation bodies for uninsured or untraced drivers (also known as 
guarantee  funds)  and  prohibited  certain  exclusion  clauses  in  insurance  contracts.  The  Third 
Directive  of  1990  established  the  principle  that  the  insurance  cover  should  include  the  whole 
territory of the EC on the basis of a single premium and stipulated that in the cases of disputes 
over  which  an  insurer  or  body  should  pay  the  compensation,  the  victim  must  be  compensated 
without delay irrespective of the dispute. The Fourth Directive of 2000 introduced facilities for the 
protection of 'visiting victims"; to that end it required Member States to set up information centres 
and compensation bodies and imposed an obligation for insurers to have claims representatives 
in other Member States. The Fifth Directive of 2005 established that systematic border checks on 
insurance  were  not  permissible,  and  that  insurance  should  cover  both  damage  to  property  and 
personal  injuries.  It  also  set  out  guarantees  for  compensation  for  victims  of  accidents  involving 
vehicles that are exempt at Member State level, codified case law on exclusion clauses, provided 
for specific cover for exported vehicles, prohibited excess against injured party and also required 
insurers to provide claims history statements for policyholders. 

All these Directives were consolidated into Directive 2009/103/EC. All references in this text are 
made in relation with this Directive. 

Following the implementation of the MID, a number of court judgements by the CJEU 
have been delivered which clarified the scope of application of the Directive. The Vnuk, 
Rodrigues de Andrade and Torreiro Rulings have in particular specified the scope. Based 
on the feedback receive from Member States, these rulings and/or pending proceedings 
have raised some concerns that a majority of Member States' legislations seems not fully 
in  line  with  these  rulings.  Given  the  amount  of  case  law  that  has  emerged  since  the 
adoption of the first directive in 1972, obtaining a full overview of applicable case law in 
all  Member  States  and  verifying  the  national  implementations  of  the  Directive  is 
complex. The different rulings and their implications are further assessed in section 3 on 
implementation of the Directive.   

2.3   The Consumer Financial Services Action Plan 

On  23  March  2017  the  Commission  adopted  a  Consumer  Financial  Services  Action 
Plan74.The section on improving motor insurance reads as follows: 

"Victims  of  traffic  accidents  are  currently  entitled  to  compensation  for  personal 
injuries  or  material  damage  even  in  case  the  vehicle  that  caused  the  accident  is 
uninsured,  or  in  hit-and-run  events,  regardless  of  where  in  the  EU  an  accident 
takes  place.  However,  there  is  no  harmonised  compensation  mechanism  in  a 

74 

COM(2017) 

139 

final 

of 

23  March 

2017, 

http://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX:52017DC0139  

106 

 
 
 
 
                                                            
 
cross-border  situation  if  an  insurer  becomes  insolvent.  The  Commission  will 
examine, following an evaluation of the Motor Insurance Directive, how to best 
ensure that accident victims will be compensated in case of insurers' insolvency.  

Another  issue  related  to  motor  insurance  concerns  the  portability  of  no-claims 
bonuses. Insurance policyholders are entitled to a statement from their insurance 
company  about  their third-party liability claims,  or  the absence of these, for the 
preceding five years. Good drivers can present these statements to a new insurer 
to obtain a discount, which can be as high as 50-60%, on their premiums ('bonus-
malus  system'  or  'no  claims  bonus/discount').  However,  in  some  instances,  such 
statements  are  not  taken  into  account  by  other  insurers,  in  particular  when 
changing  to  an  insurer  in  another  Member  State.  Recognition  of  claims  history 
statements will also be reviewed following the evaluation of the Motor Insurance 
Directive."  

Action 5 of the Action Plan states that: 

The Commission will complete the review of the Motor Insurance Directive and 
will  decide  on  any  amendments  required  to  enhance  the  protection  of  traffic 
accident  victims  and  to  improve  the  cross-border  recognition  of  claims  history 
statements (which are used to calculate no-claims bonuses)." 

2.4   The baseline – EU without the MID, only with the Green Card System 

The  baseline  for  the  evaluation,  which  would  apply  in  the  absence  of  any  EU-level 
legislation  on  this  subject,  is  the  international  Green  Card  system,  an  international 
protection  mechanism  for  victims  of  cross-border  road  traffic  accidents  which  is 
explained  in  Box  575.    The  Green  Card  system  facilitates  the  crossing  of  borders  as  it 
releases individuals driving a motor vehicle from the obligation of taking out a frontier 
insurance valid in the country they are visiting if they possess a Green Card. The Green 
Card certifies that the visiting vehicle has at least the minimum compulsory Motor Third 
Party Liability Insurance cover required by the laws of the countries visited. The Green 
Card  system  also  facilitates  the  settlement  of  claims  as  it  ensures  that  victims  of  road 
accidents  caused  by  a  visiting  vehicle  are  compensated.  The  system  consists  of  48 
participating  countries  and  functions  through  the  activities  of  the  National  Insurers’ 
Bureaux (or Green Card Bureaux) appointed in accordance with national law in the given 
Member country.  

The guarantees provided for in the Green Card system are based on the existence (for the 
vehicle involved in the accident) of a valid “Green Card” issued by the National Insurers’ 
Bureau of the country of the vehicle or under that Bureau’s responsibility. In case of an 
accident  abroad  (i.e.  in  one  of  48  countries  other  than  the  one  where  the  vehicle  is 
registered) involving the liability of the driver of the insured vehicle, any victim (either 
resident of that country or not) has the right to apply to the national bureau of the country 

75   More information on the Green Card system can be found on the website of the Council of Bureaux, 

available at: http://www.cobx.org 

107 

 
 
                                                            
where the accident occurred in order to have his claim handled and settled. In a second 
step, the bureau of the country of accident can recover all compensations paid from the 
bureau of the country from which the liable vehicle originates.  In terms of protection of 
victims,  the  Green  Card  system  ensures that  in  case  of  an  accident  involving  a  visiting 
vehicle, the victim will be compensated in accordance with the national laws where the 
accident has occurred. 

As a consequence of the Green Card system, participating States are required to conduct 
border checks to verify if a vehicle entering their territory has a Green Card and can be 
allowed access. Furthermore, while the Green Card system provides for the settlement of 
claims,  the  guarantees  and  cover  of  the  MTPL  insurance  are  set  at  national  level.  This 
implies that divergences in the levels of protection of victims can be rather significant. In 
the EU, the Green Card System is significantly upgraded and complemented by the MID. 
For example, under the basic Green Card system when compared to its combination with 
the MID, there is no mandatory requirement, across the board, to cover material damage. 
In  addition,  there  are  no  minimum  amounts  of  cover  for  personal  injury  and  material 
damage.  Furthermore,  under  the  Green  Card  System,  there  is  no  specific  provision  as 
regards protection of vulnerable road users such as  pedestrians  and cyclists. The Green 
Card  system  also  does  not  protect  visiting  victims,  i.e.  victims  of  an  accident  in  a 
participating State other than that of their residence. Under the Green Card system, there 
is  no  requirement  for  Member  States  to  have  at  national  level  a  compensation  body  to 
meet  claims  of  victims  in  case  of  accident  involving  untraced  or  uninsured  vehicles. 
Finally,  under  the  baseline  drivers  would  not  benefit  automatically  from  an  EU-wide 
coverage, on the basis of a single premium, across the EU; they might need to purchase 
the Green Card for an additional premium.  

3. IMPLEMENTATION / STATE OF PLAY 

3.1 Transposition of the Directive 

The current MID of 2009 is a consolidation of five distinct directives which been have 
been substantially amended several times over time as shown in Annex I:  

  First  Directive:  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  respact  of  the  use  of  motor  vehicles,  and  to  the  enforcement  of  the 
obligation to insure against such liability , 

 

 Second  Directive:  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), 

  Third  Directive:  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  

  Fourth  Directive:  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.   

108 

 
 
  Fifth  Directive:  Directive  2005/14/EC  of  the  European  Parliament  and  of  the 
Council  of  11  May  2005  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.  

As the 2009 Directive was a codification of previous Directives, a transposition exercise 
was  not  conducted.  As  a  consequence  there  is  no  transposition  data  available  for  the 
purpose  of  this  Directive  as  regards  possible  infrigement  actions.  The  Directive  only 
required to provide the text of the main provisions of national law which Member States 
adopted  in  the  field  governed    by  this  Directive.  This  would  typically  include  texts  of 
relevant civil and insurance law provisions that touch upon civil liability of drivers and 
owners of vehicles. As a result, there are no pending infringement actions.  

3.2.  The CJEU case law on the MID 

The Directives have been interpreted by the Union court on numerous occasions since the 
adoption of the first Directive in 1972.  

Relatively recently, the Court of Justice of the European Union clarified the scope of  the 
MTPL  insurance  obligation  laid  down  in  the  Directive76  which  has  emerged  since  the 
adoption  of  the  Directive  in  2009.  Three  judgements  in  particular  are  important  in  this 
respect,  the  Vnuk  judgment  of  201477,  the  Rodrigues  de  Andrade  judgement  of  201778 
and the Torreiro judgement of 201779. 

The  Vnuk  judgment  concerned  an  accident  involving  a  tractor  on  a  private  property  in 
Slovenia,  a  farm.  Specifically,    Mr  Vnuk,  an  employee  of  the  farm  was  knocked  off  a 
ladder by a trailer attached to a tractor that was reversing across the farmyard. Mr Vnuk 
sought compensation from the insurer of the vehicle of €15,944.10. At first and second 
instance courts the claim was dismissed on the grounds that the tractor was not used as a 
vehicle  but  rather  as  machinery.  The  case  was  further  appealed  and  the  Slovenian 
Supreme Court referred the matter to the CJEU to determine whether the circumstances 
of the accident were within the duty to insure “the use of vehicles” as laid down under 
Article 3(1) of Directive 72/166/EC. 

76   Article 4, first paragraph: "Each Member State shall, subject to Article 5, take all appropriate measures 
to ensure that civil liability in respect of the use of vehicles normally based in its territory is covered 
by insurance." 

77   Judgement of 4 September 2014, Case C-162/13 Damjan Vnuk v Zavarovalnica Trigalev. 

78   Judgement of 28 November 2017, Case C-514/16 Isabel Maria Pinheiro Vieira Rodrigues de Andrade 
and Fausto da Silva Rodrigues de Andrade v José Manuel Proença Salvador, Crédito Agrícola Seguros 
– Companhia de Seguros de Ramos Reais SA and Jorge Oliveira Pinto. 

79   Judgement of 20 December 2017. Case C-334/16  Núñez Torreiro 

109 

 
 
 
                                                            
The CJEU ruled that “Article 3(1) of [the] Directive … must be interpreted as meaning 
that  the  concept  of  ‘use  of  vehicles’  in  that  article  covers  any  use  of  a  vehicle  that  is 
consistent with the normal function of that vehicle. That concept may therefore cover the 
manoeuvre of a tractor in the courtyard of a farm in order to bring the trailer attached to 
that tractor into a barn, as in the case in the main proceedings, which is a matter for the 
referring court to determine.” 

The Court thus clarified the scope of the MID, interpreting it in a wide manner, in two 
respects: first, motor vehicles must be covered by MTPL insurance as regards their “use” 
and not only in relation with traffic; second, it is implied that the cover extends to their 
use irrespective of the classification of property they are on (public or private). 

The Rodrigues de Andrade judgement provided further clarifications. The case concerned 
a  fatal  accident  that  occurred  in  a  vineyard  involving  a  stationary  tractor,  which  by  its 
own weight, vibrations and heavy rain slipped and killed a vineyard worker. The tractor 
was being used  to power a herbicide  pump at the time of the accident. The Portuguese 
court referred the case to the CJEU to clarify whether such an accident should be covered 
by compulsory MTPL insurance as envisaged under the MID. 

The Court, first of all, reiterated its finding in Vnuk. It concluded that the characteristics 
of the terrain on which the accident occurred have no bearing on whether it is within or 
out  of  scope  of  the  MTPL  insurance  obligation.  Secondly,  the  Court  clarified  that  the 
concept  of  "use  of  vehicles"  covers "any  use  of a  vehicle  as  a  means  of  transport". On 
that basis, the Court referred to vehicles that are intended, apart from their normal use as 
a  means  of  transport,  to  be  used  in  certain  circumstances  as  machines  for  carrying  out 
work. The Court found that the fact that a vehicle is stationary or that its engine may not 
be running at the time of the accident does not, in itself, rule out the possibility that the 
function  of  the  vehicle  at  that  time  is  use  as  a  means  of  transport.  However,  the  Court 
went on to find that the concept of ‘use of vehicles’, within the meaning of the Directive, 
does  not  cover  a  situation  in  which  an  agricultural  tractor  has  been  involved  in  an 
accident  when  its  principal  function,  at  the  time  of  that  accident,  was  not  to  serve as  a 
means of transport but to generate, as a machine for carrying out work, the motive power 
necessary to drive the pump of a herbicide sprayer.  

The Torreiro Case further specified the Vnuk judgment. The case concerned Mr Núñez 
Torreiro  who  had  been  injured  in  an  all-terrain  military  vehicle  within  a  restricted 
military  area.  The  key  question  was  whether  Spanish  legislation  may,  under  the  given 
particular  circumstances  that  the  accident  happened  with  a  restricted  area,  exclude 
compulsory cover as required by the Motor Insurance Directive. The court found, in its 
judgement of 20 December, that the military vehicle fell within the definition of motor 
vehicle  in  the  Directive  and  its  use,  as  a  vehicle  (see  Rodrigues  de  Andrade)  and 
consistent with its normal function (see Vnuk) must be subject to compulsory insurance. 
It further ruled that national legislation could not derogate from the insurance obligation 
in the Directive other than as permitted by Article 5 (i.e. either by type of vehicle or in 
respect  of  certain  legal  persons,  often  Government  agencies).  No  relevant  derogations 
had  been  put  in  place.  The  court  therefore  held  that  reliance  on  the  Spanish  legal 
provision  that  sought  to  restrict  cover  to  use  on  “public  and  private  roads  or  terrain 
suitable  for  use  by  motor  vehicles”  was  precluded  by  the  proper  interpretation  of  the 
Directive. 

110 

 
 
The  three  judgements  together  permit  the  conclusion  that  the  Directive  lays  down  an 
obligation for motor vehicles to be covered by MTPL insurance when they are used for 
transport,  which  is  consistent  with  the  normal  function  of  that  vehicle,  and  this 
irrespective of the place where that use for transport occurs.  

The different interpretation of the scope of application of the MID by Member States80 
combined with the recent CJEU rulings provide evidence of a divergent implementation 
of the Directive as regards its scope of application.  

4. 

METHOD 

4.1 Time period of the Evaluation  

The  evaluation  is  based  on  information  from  consultations  with  stakeholders,  expert 
group meetings with stakeholders and a roundtable with stakeholders and desk research 
81.  Research  took  place  in  2016  and  consultation  of  various  categories  of  stakeholders 
took place during 2017 (see section 4.2 below). 

4.2 Work carried out by the Commission  

On  24  July  2017  an  Inception  Impact  Assessment  was  published  by  the  Commission.  
The roadmap announced that the focus of the evaluation was to assess the extent to which 
the general objectives of the MID were met82. In particular, the roadmap clarified that the 
evaluation  would  look  at  all  elements  of  the  Directive,  including  for  example 
terminology  and  definitions,  insurance  checks,  visiting  victims,  driverless  vehicles  and 
the transfer of vehicles.  

In  addition,  the  roadmap  identified  a  number  of  issues  which  were  already  considered 
likely  to  be  subject  of  an  impact  assessment:  these  issues  were  "the  scope  of  the 
Directive" in the light of recent CJEU case law, the compensation of victims in case of 
insolvency  of  an  insurer,  the  portability  of  claims  history  statement  which  are  used  to 
calculate no-claims discounts, the minimum amounts of cover and uninsured driving. 

The Commission carried out a public consultation on the review of the Directive from 28 
July until 20 October 2017 to obtain feedback from stakeholders on all elements of the 
Directive, including some specific elements (e.g. the scope, portability of claims history 
statements and the role and functioning of motor guarantee funds) and possible options 
for amendments including their impacts. The public consultation resulted in 3478 replies 
from  a  wide  number  of  stakeholder  groups.  However,  a  large  majority  of  respondents 
(approximately 70 percent of responses) were received following an organised campaign 

80   As revealed in the Expert Group meetings and written submissions of Member States, see annex 2 of 

the Impact Assessment. 

81   See also annex 2 of the Impact Assessment. 

82   See  the  Inception  Impact  Assessment  of  24  July  2017,  available  at:  http://ec.europa.eu/smart-

regulation/roadmaps/docs/2016_fisma_030_motor_insurance_en.pdf 

111 

 
 
                                                            
from  representatives  of  the  motor  racing  sector,  calling  for  the  exclusion  of  that  sector 
from the scope of application of the Directive. 

The evaluation also built on a public consultation carried out in the framework of the Call 
for Evidence83 on the EU regulatory framework for financial services. This consultation 
invited  to  give  feedback  and  empirical  evidence  on  the  benefits,  unintended  effects, 
consistency and coherence of the financial legislation, including the MID.  

A roundtable on the review of Directive 2009/103/EC on Motor Insurance took place on 
12  July  2017  in  order  to  obtain  direct  feedback  from  all  stakeholder  groups  including 
insurers associations, consumer organisations and the Council of Bureaux.   

On 22 September 2017, a meeting with experts from Member States' authorities (Expert 
Group on Banking, Payments and Insurance (Insurance Formation) took place preceded  
by  two  other  meetings  of  this  expert  group  in  May  and  in  December  2015.  These  two 
meetings had the specific purpose to discuss the scope of the Directive in the light of the 
CJEU Vnuk ruling. 

The evaluation builds also on statistics and reports provided by the Council of Bureaux84 
and  reports  from  the  association  of  industry  practitioners85.    The  report  also  builds  on 
information from the CARE database86 for statistics road accidents resulting in death or 
injury. 

4.3 Limitations  

There  are  some  limitations  as  regards  to  the  information  feeding  into  the  evaluation 
report. In particular, there is limited available data to quantify the costs and benefits of 
some requirements of the Directive. National Guarantee funds are not required to report 
on  the  costs  of  claims  for  the  purpose  of  uninsured  or  untraceable  drivers  or  their 
operating costs.  

The  Motor  Insurance  Directive  does  not  require  claims  representatives  to  provide 
information  on  the  costs  of  claims  deriving  from  visiting  victims.  There  are  also  no 
obligations  imposed  on  insurers  to  report  on  the  costs  of  the  motor  third  party  liability 
insurance, in particular contributions to national guarantee funds.   

83   http://ec.europa.eu/finance/consultations/2015/financial-regulatory-framework-review/index_en.htm 

84   The organisation coordinating the activities of the different National Motor Insurers' Bureaux that are 
members of the Green Card System and acting as a secretariat for the bodies applying the EU MID: 
Compensation Bodies, Guarantee Funds and Information Centres 

85   In  particular:  Insurance  Europe,  European  Motor  Insurance  Markets,  November  2015  and  European 

Motor Insurance Markets Addendum, Insurance Europe, June 2016 

86   CARE is the European centralised database on road accidents which result in death or injury across the 
EU.  The CARE system allows to identify and quantify road safety problems throughout the EU. 

112 

 
 
                                                            
Furthermore, while confidential data on uninsured driving is available at  national level, 
detailed data on accidents and claims deriving from accidents with an uninsured vehicle 
originating from another Member State for each Member State is not publicly available. 
However, there is some aggregated data on the total cost of claims deriving from cross-
border accidents and uninsured driving.  

In addition, public information on the costs of claims due to insolvency of an insurer is 
not  available.  While  there  is  information  on  insolvent  insurers,  the  total  cost  of 
undetermined  claims  remains  unknown  as  legal  proceedings  on  these  insolvency  cases 
are still pending.  

As  regards  claims  history  statements,  there  is  no  systematic  information  on  citizens 
moving  across  borders  and  requiring  a  new  MTPL  insurance,  only  individual  cases.  In 
addition,  in  absence  of  specific  reporting  requirements  on  insurers  on  claims  history 
statements, there is no information on the number of claims history statements issued by 
insurers.  

5. 

ANALYSIS AND ANSWERS TO THE EVALUATION QUESTIONS 

The overall aim of the evaluation is to  analyse the  effectiveness, efficiency, coherence, 
relevance and EU added value of the Motor Insurance Directive. 

The main evaluation questions are summarized in the table below: 

Table 7: evaluation questions 

Criteria 

Main evaluation questions 

Effectiveness  

To  what  extent  have  the  objectives  of  this  Directive  been  achieved?    In 
particular,  to  what  extent  is  the  high  level  of  protection  of  victims  of  motor 
insurance  accidents  and  the  free  circulation  of  vehicles  within  the  EU  been 
achieved? 

Which issues have emerged since the implementation of the Directive?  

Efficiency  

What are the costs and benefits (monetary and non-monetary) associated with 
the Motor Insurance Directive in the Member States? 

What good practices for cost-effective implementation can be identified? 

Are  there  any  specific  provisions  in  the  MID  that  that  hinder  cost-effective 
implementation?  

Are  there  specific  challenges  for  SMEs,  and  micro  enterprises  in  particular, 
face when implementing the MID? 

Coherence  

Are  there  any  specific  inconsistencies  and  unjustified  overlaps,  obsolete 
provisions and/or gaps can be identified in relation to the entire EU regulatory 
framework in this policy area and the UN-based Green Card System? 

113 

 
 
 
 
 
 
 
Relevance  

To what extent are the objectives of MID still relevant and valid?  

Beyond these objectives, are there any new technological developments which 
would require further policy intervention? 

EU added value  

What has been the EU added value of the rules on third party liability  motor 
insurance in the EU? 

5.1. Effectiveness 

The evaluation assessed the functioning of the Directive in order to understand to which 
extent its objectives have been achieved.  

In comparison with the baseline, the MID provides a number of benefits compared to the 
Green  Card  system  to  achieve  the  objectives  of  ensuring  a  high  level  of  protection  of 
road accidents  and, at the same time,  to ensure free circulation  of persons and vehicles 
within the EU. 

To ensure a high level of protection of victims beyond the baseline requirements set out 
in  the  Green  Card  system,  the  MID  sets  out  uniform  minimum  amounts  of  cover  for 
personal injury and material damage ensuring that across the EU victims are protected at 
least  to  these  minimum  levels.  Furthermore,  in  addition  the  MID  sets  out  a  mandatory 
requirement to cover material damage in all EU Member States. Furthermore, the MID 
also  ensures  protection  of  vulnerable  road  users  such  as  pedestrians  and  cyclists.  In 
addition,  the  MID  sets  out  rules  to  protect  visiting  motorists  based  on  the  minimum 
amounts  of  cover,  not  included  in  the  Green  Card  System.  Member  States  are  also 
required to have at national level a compensation fund to compensate victims in case of 
accident caused by an untraced or uninsured vehicle.  

To  facilitate  the  free  circulation  of  persons  and  vehicles,  the  MID  abolishes  border 
checks on motor insurance, which are normally required under the Green Card System. 
Furthermore,  the  MID  introduced  the  requirement  for  a  single  premium  for  MTPL, 
allowing  EU-wide  circulation  of  vehicles  without  the  need  to  obtain  additional  MTPL 
cover when moving across-borders.  

The public consultation provided evidence that also stakeholders consider the Directive 
provides an efficient system to protect victims of motor accidents. Only less than 1% of 
responses from a total of 3478 indicated that there are some remaining problems with the 
swift compensation of victims. Nevertheless, as part of the evaluation, a number of issues 
have emerged which may affect effective functioning of the Directive and require a more 
in-depth  assessment.  In  particular,  terminology  and  definitions,  the  scope  of  the 
Directive,  the  compensation  of  victims  when  the  insurer  is  insolvent,  the  minimum 
amounts of cover, and the transferability of information on claims history and uninsured 
driving.  

These topics are further described in the following sections.  

5.1.1. Consistency of terminology and definitions and translation of certain concepts 

114 

 
 
 
 
 
The codification of the five directives into Directive 2009/103/EC has resulted in some 
inconsistencies  in  terminology  and  definitions.  In  this  area  the  following  issues  were 
identified:  

a) Victims and injured parties.  

The  MID  entails  uses  both  the  terms  "victims"  and  "injured  parties"  through  the  text, 
creating legal uncertainty on the obligations enshrined in the Directive and the level  of 
protection.  

The term "victim" is used in Article 9, 10 and 12 and "injured party" is used in Article 1, 
5, and 20 alternatively. 

However,  the  term  "injured  party"  is  a  broader  concept  as  it  could  cover  also  persons 
who  are  not  directly  linked  with  the  accident  (e.g.  family  members).  This  distinction 
creates  potentially  an  unequal  playing  field  with  those  provisions  that  use  the  term 
"victim". In case of an accident, depending on the provision, only the direct "victim" of 
the  accident  would  be  reimbursed  while  "injured  parties"  include  e.g.  also  family 
members suffering from damages related with the accident.  

In order to provide more clarity, this situation could be remedied through the introduction 
of  definitions  in  the  Directive  (defining  not  only  the  term  ‘injured  party’  but  also  the 
notion ‘victim’) or the omission of one of the two terms. 

b) Definition of vehicle.  

 The  motor  insurance  Directive  definition  of  "vehicle"  includes  "trailers".  Therefore, 
compulsory MTPL insurance covers in case of an accident both a vehicle and its trailer. 
The Council of Bureaux explained in their contribution to the public consultation that in 
practice,  some  Member  States  require  separate  registration  for  a  truck  and  the  attached 
trailer,  which  have  therefore  a  distinct  registration  number.  In  those  Member  States, 
where  only  the  registration  plate  of  the  trailer  is  known,  the  vehicle  is  considered 
unidentified. In  other Member States,  victims  may present  a claim for compensation to 
both the insurer of the truck and the insurer of the trailer.  

In some instances, the registration numbers of the truck/trailer set might be registered in 
different Member States. In these cases, it is difficult to determine whether the truck or 
the trailer was liable for the accident. In cases where when the two vehicles come from 
different  Member  States  and  the  accident  is  a  hit  and  run  or  involves  an  uninsured 
vehicle,  the  settlement  of  claims  falls  under  Article  10  of  MID  which  means  that  the 
body responsible in each Member State must compensate the victims. According to the 
CoB, problems originate at the level of the registration of the vehicle, which falls under 
national competence. For this reason, the conflict rules of Private International Law are 
more relevant than the provisions of the MID.  As a consequence, a change in the MID 
might not be effective to address this issue.  

Based on the above, the definition of a "vehicle" poses in some circumstances problems 
for  motor  vehicles  consisting  of  set  of  two  vehicles  which  can  be  separated  from  each 

115 

 
 
other and registered in distinct Member States. As a consequence, it may be sometimes 
difficult to determine the liable party in cases an accident is involving a trailer.  

c)  Definition  of  Guarantee  fund.  The  Directive  uses  the  term  "body  responsible  for 
compensation" under Article 10 and the term "compensation body" in Articles 24 and 25 
of the Directive. This term encompasses what is in practitioners' vocabulary understood 
to be the "guarantee fund" the task of which is to compensate victims of accidents that 
involve uninsured and untraced vehicles. Some stakeholders consider the use of the two 
terms  confusing  because  the  term  "compensation  body"  was  also  introduced  by  the  4th 
Directive for the purpose of protecting visiting victims. According to these stakeholders, 
the  sole  role  of  this  body  should  be  to  serve  as  a  financial  safety  net  in  the  case  the 
responsible insurer does not duly respond to the claim.   

d) Inconsistent language versions: "Use of the vehicle" versus "circulation" 

Prior  to  the  Vnuk  ruling  in  2014,  and  in  some  cases  still  now,  certain  Member  States 
interpreted  the  obligation  for  MTPL  insurance  as  laid  down  in  the  Directive  as  not 
extending  to  all  motorised  vehicles  in  all  places  and  contexts.  In  particular,  certain 
Member States do not impose domestically an obligation for MTPL insurance for certain 
uses of vehicles outside road traffic.  
The uncertainty about the exact scope of the MTPL requirement as laid down in the MID 
was compounded by the terminology used in different language versions of the Directive: 
the English text of article 3 reads " Each Member State shall, subject to Article 5, take all 
appropriate  measures  to  ensure  that  civil  liability  in  respect  of  the  use  of  vehicles 
normally based in its territory is covered by insurance", whereas the French text contains 
the  word  "circulation"  where  the  English  text  has  "use".87  The  CJEU  later  clarified  the 
scope of the Directive on three occasions in particular as explained in section 3.2.  

e) Inconsistent translation: minimum amounts of cover 

The Directive sets out minimum amounts of cover88, to ensure the minimum protection 
of victims of motor accidents across the EU. However, there is a difference in the exact 
articulation of the provision between the French and the English language versions. This 
provision sets the minimum amount for personal injuries at 1 million EUR per victim and 
5  million  EUR  per  claim  in  its  English  version.  In  the  French  version,  the  provision 
refers either to a "victim" or an "accident" ('sinistre'). It could be argued that the English 
version  refers  in  both  cases  to  the  same  thing,  because  the  terms  "victim"  and  "claim" 
could be interpreted as being related to a single person, rather than to the whole of the 
accident.  As a consequence,  there might be different levels  of protection for victims of 
motor accidents depending on where they occur.  

87 " Chaque État membre prend toutes les mesures appropriées, sous réserve de l’application de l’article 5, 
pour  que  la  responsabilité  civile  relative  à  la  circulation  des  véhicules  ayant  leur  stationnement 
habituel sur son territoire soit couverte par une assurance." 

88   Article 9 of Directive 2009/103/EC on Motor Insurance  

116 

 
 
 
                                                            
5.1.2. Compensation of victims of accidents in cases where the insurer is insolvent 

The MID currently does not contain any provisions regarding compensation of victims of 
accidents  in  cases  of  insolvency  of  motor  insurers,  either  domestically  or  cross-border. 
As a consequence, there is no legal obligation to reimburse the victim of a motor accident 
in case of insolvency of the insurer. While the Directive requires Member States to set up 
guarantee funds to meet costs arising from accidents caused by uninsured or untraceable 
vehicles (Article 10, compensation bodies), such funds are not currently obliged by EU 
legislation to meet costs arising from claims where the motor insurer of the liable party is 
insolvent.  This  means  that,  if  national  law  does  not  provide  for  any  specific  protection 
scheme, victims of accidents caused by a vehicle insured with an insolvent MTPL insurer 
may be left without compensation. 

In  light  of  a  number  of  recent  cases  of  insolvency  of  motor  insurers  with  cross-border 
activities, which led to significant delays in the payment of compensation to victims, this 
has been identified by a large number of stakeholders as a lacuna in the Directive, and an 
area where EU-level action would have added value.  

A  distinction  can  be  made  between  scenarios  of  insolvency  without  cross-border 
provision  of  service  and  scenarios  with  cross-border  provision  of  services.  Both  are 
further explained below. 

a) Scenarios without cross-border provision of services. 

For insolvencies which involve insurers that are based in the same Member State as the 
insured party three scenarios are outlined in table 8 below.  

Table 8: For insolvency without cross-border provision of services 
Type of situation 

CoB 

Type 
regulation/agreement 

of 

Reference 
agreement 

to 

the 

bodies 
the 

National 
signatory  of 
agreement 
NA 

None,  in  the  absence 
of 
cross-border 
a 
dimension. 

NA 

involving 
1.  Accident 
insolvent 
insurer, 
policyholder and victim, 
all  based  in  the  same 
MS 
involving 
2.  Accident 
insurer, 
insolvent 
policyholder  based 
in 
Member  State  (MS)  A, 
but  accident  happens 
in MS B and involves a  
victim resident in MS B. 
involving 
3.  Accident 
insurer, 
insolvent 
policyholder 
both 
based  in  the  same  MS 
(A) and a visiting victim 
from a MS B. 
Source: CoB  

Yes,  CoB  agreement 
on a compulsory basis 

CoB 
Internal 
Regulations  applicable 
to 
the  Green  Cards 
system. 

EEA 

Yes,  CoB  agreement 
on a voluntary basis 

CoB Agreement 2008 

EEA 
the 
with 
exception  of  EE, 
HR, IE, RO, SE UK, 
IS, NO 

117 

 
 
 
 
 
 
According  to  the  Council  of  Bureaux  (CoB),  all  but  one  Member  State  (Sweden)  have 
put  in  place  mechanisms  to  deal  with  scenario  1  events  domestically,  ensuring  that  the 
victim is at least to a certain extent compensated. However, in its response to the public 
consultation the CoB outlined some deficiencies in the current system in case of domestic 
insolvencies to the detriment of the protection of victims. According to the CoB not all 
Member  States  provide  compensation  of  victims  in  full;  some  Member  States  have 
introduced  limits  different  from  the  amounts  laid  down  in  the  MID  or  limitations  for 
specific items.  In a number of Member States compensation is provided by a different 
entity than the Compensation Body required by article 10 of the Directive and  subject to 
different procedures and requirements prescribed in the MID.  

Scenario  2  events  are  covered  by  CoB  internal  regulations  which  are  binding  for 
members.  

Scenario 3 events are covered by a voluntary agreement between the CoB members, but 
not  all  Member  States'  bodies  are  signatories.89  As  a  consequence,  in  case  of  the 
insolvency  of  an  insurer,  visiting  victims  are  not  always  protected  in  all  EU  Member 
States and might therefore not be compensated or only partly compensated. Furthermore, 
victims might be compensated in accordance with national requirements but not in full, 
unlike for accidents caused by uninsured or untraced vehicles. 

b. Scenarios of insolvencies with cross-border provision of services. 

For cross-border activities, where the insurer is selling MTPL policies cross-border either 
using freedom of services or a branch, there is currently no binding scheme that would 
cover  the  distinct  situations  outlined  in  table  9  below.  The  CoB  currently  administers 
three  voluntary  agreements,  one  for  domestic  (non-visiting)  victims  of  accidents  (1995 
agreement)  and  one  for visiting  victims  in  other  Member  States  (2008  Agreement)  and 
one  for  insolvency  in  case  of  insurers  operating  on  a  freedom  of  services  basis  (2006 
Agreement)90.  All  three  scenarios  outlined  below  are  thus  covered  by  voluntary 
agreements  of  which  some  EU  Member  States'  compensation  bodies  are  not  signatory 
and/or have negotiated specific opt-out clauses or limitations. 

by 

cross-border 

Table 9. For insolvent insurer providing cross-border services  
Reference 
Regulated 
Type 
agreement 
agreement? 
situation 
CoB agreement 1995 
Yes, on a voluntary basis 
1. Insolvent cross-border 
from  Member 
insurer 
local 
State 
local 
policyholder, 
victim in MS B. 

(MS)  A, 

CoB 

to 

the 

MS  signatory  of  the 
agreement 
EEA 
with 
exception of: 
HR,  LV,  LT,  LU, 
MT, RO, IS, NO 

the 

Reservations by  
BG,  IT,  IE,  PT,  SE, 

89  2008  Agreement  covering  protection  of  visitors  cases  established  under  the  Fourth  Directive.  Non-

signatories are EE, HR, IE, RO, SE UK, IS, NO . 

90  Agreements  from  1995,  2006  and  2008  respectively.  See  Annex  12  for  a  full  analysis  of  the  current 

system of voluntary agreements administered by the CoB.  

118 

 
 
 
 
 
 
 
 
                                                            
2. Insolvent cross-border 
insurer from MS A, local 
policyholder  in  MS  B, 
visiting  victim  from  MS 
C. 

3. Insolvent cross-border 
insurer 
from  MS  A, 
policyholder from MS B 
travelling  to  MS  C  and 
from  MS  C 
victim 
(Green Card). 

Source: CoB 

Yes, on a voluntary basis 

CoB  Agreement  2008 
and/or  CoB  agreement 
1995 

Yes, on a voluntary basis 

CoB 2006 Agreement 

UK, 
See 
above 
signatories    1995 
for 
and 
table  1 
signatories 
2008 
agreement. 

EEA  with 
the 
exception  of  BG 
HR, LV, LT, LU, 

Derogations  made 
by UK, IE, MT, 
LI. 

The  agreement  of  2008  aims  to  ensure  that  each  national  insurers'  bureau  guarantees 
settlement of claims occurring in its territory and caused by the use of vehicles normally 
based in the territory of another Member State, whether or not such vehicles are insured, 
in  accordance  with  the  requirements  of  its  national  law  on  compulsory  insurance.  The 
agreement lays down two steps. In case of insolvency of an insurer with a cross-border 
element, the national bureau of the territory where the accident happened will in a first 
step reimburse the victims. In a second step, the initial bureau can obtain recourse from 
the bureau where the insurer has its head office. A detailed explanation of the procedure 
can be found in the box below. 

 Box  6:  Procedure  laid  down  in  the  CoB  multilateral  agreement  of  2008  in  case  of 
insolvency 
As  a  general  principle  the  Bureau  of  the  country  of  accident  shall  commence  investigation  to 
enable  a  quick  resolution  of  the  case  once  an  victim  presents  a  claim.  It  has  the  obligation  to 
provide  information  to  the  insurer  at  risk  or  the  Guarantor  Bureau,  that  is  to  say  the  Bureau  of 
which said insurer is a member. 

The Guaranteeing Bureau is bound by the confirmation of cover given by the Intermediary acting 
on behalf of the insurance company, and in particular when the insurance company is wound up, 
and the Guaranteeing Bureau has to substitute for it in obligations arising out of the claim. 

Procedure to be followed when the insurer at risk is in a state of insolvency: 

All Guaranteeing Bureaux are bound by the debts of one of its members in a state of insolvency 
including any late interest due in carrying out the demands for compensation (see Article 5.2). 

All Guaranteeing Bureaux, who are aware that a member is in a state of insolvency (winding-up 
or other) shall inform the Council of Bureaux Secretariat immediately as well as all other Bureaux. 

After  having  received  this  information,  these  Bureaux  shall  inform  the  Guaranteeing  Bureau  in 
question  of  all  the  pending  demands  for  compensation  addressed  to  the  member  in  a  state  of 
insolvency as well as informing them of all the cases which are being handled. 

Demands for compensation concerning claims settled after the liquidation of a Company shall be 
sent to the Bureau of which the Company is a Member. If the Bureau of the country of accident or 
its Member does not send the compensation demand directly to the Guaranteeing Bureau after 
the date of notification to the Council of Bureaux, the Guaranteeing Bureau is not obliged to pay 
penalty interest. 

119 

 
 
  
 
 
 
The  deadline  for  compensation  of  60  days  is  calculated  as  of  the  date  of  receipt  by  the 
Guaranteeing Bureau. 

The payment of compensation is sometimes delayed by court proceedings. In  those cases, the 
Bureau  of  the  country  of  accident  may  be  obliged  to  block  the  amounts  under  dispute  or  to 
deposit  them.  Where  the  amount  is  considerable  (exceeds  10.000  EUR  or  its  value  in  the 
currency  of  the  country  of  the  accident  at  the  rate  of  exchange  on  the  date  of  the  demand  for 
compensation)  and  the  proceedings  are  pending  for  a  long  period  of  time,  the  liquidity  of  the 
handling Bureau might be jeopardised for an uncertain period. It is appropriate therefore to allow 
this  Bureau  to  ask  for  the  “compensation”  of  the  amounts  in  question.  In  this  way  the  financial 
burden (and risks) of such claims is placed on the final paying entity. In this case, however, the 
handling  Bureau  must  provide  proof  of  the  amount  being  blocked  or  deposited  and  give 
appropriate  reasoning  for  what  had  happened.  The  compensation  is  not  a  recognition  that  the 
amount is due. Depending on the final outcome of the proceedings, the amount must be off-set 
against the final amount due between the  parties  involved. The Bureaux involved should agree 
on appropriate procedures for this process (e.g. introduce time limits, issue additional demands 
for compensation). 

Source: CoB explanatory Memorandum 

For cross-border activities, according to the CoB91, the voluntary agreements that tackle 
this  issue  have  shown  in  practice  a  number  of  significant  flaws.  In  particular,  some 
national  bodies  have  not  signed,  some  others  have  withdrawn  from  agreements 
previously  signed  and  some  have  signed  with  reservation  clauses  and  limits.  As  a 
consequence, in recent cases (See Confidential Annex 9 for a list of recent cross-border 
failures  of  motor  insurers)  where  an  insolvent  insurer  was  providing  services  across 
borders  it  was  often  not  clear  which  party  was  ultimately  responsible  for  refunding 
claims of victims, and delays in compensation of victims occurred. 

In particular, evidence from the latest insolvency cases (see Box 7 below) has shown that 
victims are likely to experience negative consequences. These include considerable delay 
in payment of claims due to ongoing court proceedings or claims which are reimbursed 
only partially and below the minimum amounts of cover laid down in the Directive. This 
implies that victims are reimbursed considerably less and with a longer delay than if they 
were victim of an accident in case of a solvent insurer.  

In the period 1998-2017, eight cases of insolvency of such insurers have been reported 
(See confidential Annex 9), concerning five "Home" Member States of registration and 
supervision of the insurer (UK, NL, MT,  RO, UK, LI) and nine "Host" Member States 
where  MTPL  policies  were  sold  (DE,  DK,  EL,  ES,  FR,  HU,  IT,SK,UK).    Based  on  a 
preliminary  estimation  due  to  ongoing  cases,  there  were  approximately  11,500  claims 
against  policyholders  of  those  insurers  after  their  insolvency.  Based  on  the  available 
information  the  value  of  reported  claims  is  approximately  EUR  180  million92.  This  is 
certainly  an  underestimation  of  the  total  problem,  as  for  3  out  of  8  insolvencies 

91   In their contribution to the public consultation, a summary of the public consultation can be found in 

Annex 2. An assessment of the voluntary agreements can be found in Annex 12. 

92   Information from the Council of Bureaux. As some insolvency case are still ongoing, there could be a 

further increase in claims both in number of claims and total value. 

120 

 
 
 
 
                                                            
information on claims is not available. A rough extrapolation of the total value leads to 
an approximate value of  EUR 288 million. 

One specific case is described in the box below. 

Box 7: case study on insolvency: Setanta Ltd 

Evidence from delays in claims were reported for the insolvency of Setanta Insurance (“Setanta”) 
a  Maltese  incorporated  insurance  company  which  sold  motor  insurance  cross-border  to 
policyholders in Ireland. Setanta was placed into voluntary liquidation in Malta in April 2014. More 
than  two  years  later,  in  November  2016  there  were  still  1400  claims  unpaid  for  an  estimated 
value of EUR 90 Million93 to the detriment of victims. If Setana were a solvent insurer, the claims 
would have been treated without delay. 

Morover  there  was  a  court  case  in  Ireland  to  determine  whether  the  compensation  of  victims 
would be undertaken by the general Irish Insurance compensation fund (which would cover only 
65  percent  of  the  value  of  claims)  or  the  motor  insurance  bureau  (which  would  reimburse  100 
percent of the value of claims); no attempt was made to bring about compensation of victims by 
any body in Malta, as there was no legal possibility to do so.  On 8 of June 2017, there was an 
Irish  court  ruling  that  attributed  the  settlement  to  the  Irish  Insurance  compensation  fund  (ICF), 
resulting in a payment of claims of up to 65 percent or €825,000, whichever is the lesser, to the 
detriment of victims of motor insurance accidents.94   

If Setana had been a solvent insurer, (or even in case of an accident with an uninsured driver or 
untraceable  driver)  the  claims  would  have  been  treated  without  delay  and  with  100%  of 
compensation (up to the minimum amounts laid down by the MID, currently just over €6 million 
for personal damage and €1 million for material damage).  

Therefore, as demonstrated above, in the event of an insurer becoming insolvent, victims 
of traffic accidents have difficulties to obtain compensation in some Member States, in a 
timely way and in full. This is in particular in the case where the liable party is insured by 
a cross-border insurer. Furthermore, fair and effective risk-sharing in case of insovency 
and cross-border provision of services is not guaranteed. In the absence of clear rules on 
the ultimate liability of a claim in cross-border situations, a compensation fund which has 
compensated a victim in case of an insolvent insurer cannot get recourse to the fund of 
the home Member State of the insolvent insurer.  

5.1.3 Scope of the Directive (in the light of the CJEU case-law) 

As outlined in section 5, a number of Member States have interpreted the obligation for 
MTPL insurance as laid down in the directive as not extending to all motorised vehicles 
in  all  places  and  contexts.  However,  the  recent  CJEU  rulings  have  clarified  that  the 
Directive lays down an obligation for motor vehicles to be covered by MTPL insurance 

93   Information  was  reported  in  the  press,  available  at:  https://www.irishtimes.com/business/financial-
7 

services/still-1-666-outstanding-claims-against-setanta-insurance-1.2926779, 
December 2017 

consulted 

on 

94   See  http://www.kennedyslaw.com/casereview/setanta-liquidation-irish-supreme-court-finds-in-favour-

of-mibi/ 

121 

 
 
 
 
  
 
 
                                                            
when  they  are  used  for  transport,  which  is  consistent  with  the  normal  function  of  that 
vehicle, and this irrespective of the place where that use for transport occurs. 

As outlined in section 5, the CJEU rulings have has raised concerns that not all Member 
States are currently fully in compliance with the MID as clarified by the CJEU  rulings. 
Given the amount of case law that has emerged since the adoption of the first directive in 
1972, obtaining a full overview of applicable case law in all Member States and verifying 
the national implementations of the Directive is complex. Therefore, is difficult to verify 
the compliance of Member States with the CJEU rulings.  

In those Member States which do not extend the insurance obligation for motor vehicles 
to  private  property  without  public  access,  there  is  normally  a  domestic  obligation  for 
some other kind of liability insurance policy to be taken. But this is not the case for all 
Member States, and where it is the case, the amounts of cover may be inferior to those 
laid  down  in  the  Directive.  This  exposes  citizens  to  a  risk  of  non-compensation  for 
accidents caused by certain motor vehicle activities in certain Member States. 
No evidence has  come  to  light  during the evaluation  that any particular types of  motor 
vehicles  or  motor  activities  should  be  excluded  from  the  scope  of  the  Directive  at  EU 
level.  To  do  so  would  remove  protection  from  victims  of  accidents  caused  by  such 
vehicles,  in  the  absence  of  national  legislation,  which  may  require  lower  levels  of 
protection than required by the Directive. 

According to a recent ruling of the Court,  there is  "no provision in  Directive  2009/103 
that  limits  the  scope  of  the  insurance  obligation  and  of  the  protection  which  that 
obligation is intended to give to the victims of accidents caused by motor vehicles, to the 
use of such vehicles on certain terrain or on certain roads"95. 

This is without prejudice to the right of Member States under article 5 of the Directive to 
exempt  certain  legal  or  natural  persons  from  MTPL  insurance  obligation,  types  of 
vehicles or vehicles bearing special number plates at national level (accidents caused by 
such nationally exempt vehicles must be compensated by the national guarantee fund).  

The  different  national  application  of  the  MID  is  identified  as  an  issue,  because  it  is 
creating  legal  uncertainty  on  the  scope  of  application  of  the  MID  to  the  detriment  of 
victims of motor accidents. The Court judgements referred to in section 5.2 above have 
provided  welcome  further  clarity  regarding  the  scope,  and  a  codification  of  the 
judgements into the text of the Directive is considered as the appropriate way forward96. 

5.1.4  Transferability of information about claims history 

In order to facilitate switching MPTL insurance and to avoid fraudulent benefits, insurers 
are obliged by article 16 of the Directive to provide policyholders with a claims history 
statement. Such information may help a policyholder to obtain a "no claims bonus" (or a 

95   Rodrigues de Andrade, C-514/16, EU:C:2017:908, paragraph 36 

96  For the detailed reasoning on this approach, see annex 11 to the impact assessment which this evaluation 

report accompanies. 

122 

 
 
                                                            
better  "bonus-malus"  rating)  with  a  new  insurer,  either  in  the  same  Member  State  or 
another  Member  State,  thus  reducing  premiums.  The  Directive  is  silent  as  to  how  the 
receiving insurer should treat the claims statements, nor there is a prescribed form. 
In  the  years  preceding  the  evaluation,  some  correspondence  received  from  citizens' 
alleged  problems  in  obtaining  such  recognition.  The  insurance  sector  denied  that 
problems exist in this area, and pointed to the high cost of imposing any new requirement 
on motor insurers regarding recognition of claims history statements from other Member 
States.  There  was  some  acknowledgement  from  insurers  that  the  existence  of  a 
standardised form for such claims statements may help to mitigate fraud (allegedly some 
citizens moving to another Member State may forge such claims history statements in the 
aim of obtaining unjustified reduction in their insurance premium from a new insurer). 

All  Member  States  opposed  any  new  obligation  being  placed  on  insurers  regarding  the 
treatment  of  a  claims  history  statement,  though  a  number  of  Member  States 
acknowledged  possible  advantages  from  a  standardised  form,  and  few  Member  States 
opposed  an  extension  of  the  reference  period  for  claims  history  statements  from  the 
current five years (though one Member State pointed out that it only obliges insurers to 
keep  such  information  for  seven  years).  One  Member  State  claimed  that  the  right  to  a 
claims history statement would be very rarely used by policyholders. It was pointed out 
that even  within a Member State, a no-claims record of a  policyholder may be fully or 
partly disregarded depending on the place of the old and the new residence (small village 
vs.  big  city,  flat  land  vs.  mountain  area  etc.).  Some  Member  States  use  a  formalised 
system for the calculation of no-claims bonuses for policyholders while others leave the 
consideration of bonuses to individual insurers. 

5.1.5  Minimum amounts of cover, and their periodic revision 

The  Directive  lays  down  minimum  obligatory  amounts  of  cover  up  to  which 
compensation  is  provided  under  a  motor  insurance  third  party  liability  policy.  These 
minimum  amounts  ensure  that  there  is  a  sufficient  level  of  minimum  protection  of 
victims of motor vehicle accidents across the EU in case of personal injury and damage 
to  property,  irrespective  of  the  category  of  vehicle.  These  amounts  are  reviewed  every 
five years to take into account inflation 

Two  different  minimum  amounts  of  cover  for  an  MTPL  policy  are  laid  down  in  the 
Directive, for most Member States, in the case of personal injury, the minimum amount 
of  cover  is  €1  220  000  per  victim  or  €6  070  000  per  claim,  whatever  the  number  of 
victims; and in the case of material damage, the minimum amount is to €1 220 000 per 
claim, whatever the number of victims. These amounts are reviewed for inflation every 
five years. 

A  first  issue  regarding  the  minimum  amounts  are  whether  they  are  appropriate  in 
absolute  or  should  be  higher  or  lower.  Given  the  widely  differing  average  cost  of 
compensation  to  victims  of  motor  vehicle  accidents  across  Member  States,  depending 
inter alia on the level of court awards for damages, a minimum amount set at EU level 
will  inevitably  be  inadequate  to  cover  the  cost  of  the  most  expensive  accidents  in  any 
Member  State,  but  setting  the  minimum  amount  at  that  level  would  cause  unintended 
increases  in  motor  insurance  for  policyholders  in  a  number  of  Most  Member  States. 
There is therefore a delicate trade-off to be exercised. 

123 

 
 
A  second  issue  is  whether  the  minimum  amounts  should  be  differentiated  according  to 
category  of  motor  vehicle  (private  car,  motorbike,  truck,  bus  and  so  on).  In  the  largely 
consensual  view  of  stakeholders  the  amounts  should  not  be  differentiated,  because  a 
small vehicle could potentially cause an accident with bigger damage as a large vehicle 
(e.g.  private car or motorbike causes a bus to go off road). 

Another issue concerns the procedures and periodicity of the current five-yearly review 
of  the  minimum  amounts.  MID  allowed  different  transition  periods  for  a  number  of 
Member  States  to  introduce  the  minimum  amounts  (which  had  all  expired),  for  which 
reason  the  timing  of  the  review  of  the  minimum  amounts,  and  thus  the  minimum 
amounts themselves, are different in these Member States. The reason for this is that the 
review  period  of  five  years  only  started  at  the  end  of  the  Member  States'  individual 
transitional period. Stakeholders were largely of the view that the periods should be reset 
and harmonised for all Member States, in order to ensure that minimum amounts of cover 
are  the  same  across  the  EU.  Table  10  below  shows  how  the  actual  level  of  minimum 
amount of cover differ across Member States, resulting in unequal protection of victims. 

Table 10: Actual amounts of cover required in different Member States for personal injuries and 
personal damage in EUR97.  

Personal Injuries (in EUR) 

Material Damage (in EUR) 

Country 

Per person 

Per claim 

Per person 

Per Claim 

111.802.803 

1.294.762* 

1.022.584 

1.294.762* 

1.000.000 

BE 

BG 

CZ 

DK* 

DE 

EE 

IE 

EL 

ES 

FR 

HR* 

IT 

CY* 

LT 

LV 

LU 

HU 

MT 

Unlimited 

5,112, 919 

15.281.092* 

7.500.000 

5.600.000 

unlimited 

70.000.000 

unlimited 

5.603.251* 

5.000.000 

33.540.000* 

5.000.000 

5.000.000 

unlimited 

5.123.771* 

2.500.000 

111.802.803 

1.022.584 

3.083.027* 

1.120.000 

1.200.000 

1.120.000 

1.000.000 

15.000.000 

1.120.000 

1.120.650* 

1.000.000 

1.120.000* 

1.000.000 

1.000.000 

unlimited 

1.601.178* 

500.000 

97   The minimum amounts of cover for the Member States without a transition period is currently set at 

 

 

in  the  case  of  personal  injury,€1  220  000  per  victim  or  €6  070  000  per  claim,  whatever  the 
number of victims; 

in  the  case  of  material  damage,  the  minimum  amount  is  increased  to  €1  220  000  per  claim, 
whatever the number of victims.  

In some Member States, the minimum amounts are expressed in local currency and not in EUR and 
consequently the minimum amount can vary over time due to changes in the exchange rate. 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
NL 

AT 

PL 

PT 

RO 

SK 

SI 

FI 

SE* 

UK 

5.600.000 

5.800.000 

5.000.000 

5.000.000 

5.000.000 

5.000.000 

5.000.000 

unlimited 

32.342.921* 

unlimited 

1.120.000 

1.200.000 

1.000.000 

1.000.000 

1.000.000 

1.000.000 

1.000.000 

3.300.000 

32.342.921* 

1.442.880 

Source: Council of Bureaux, last update 26/11/2015 

In addition, the Insurance and Occupational Pensions Authority (EIOPA) pointed out in a letter to 
the Commission98 that higher levels of minimum amount of cover set at national level in a few 
Member States would have the potential to create market distortions for the insurance of trucks, 
buses  and  coaches  circulating  across-borders.  In  particular,  the  differences  would  provide 
incentives for commercial vehicles to register and obtain MTPL insurance in Member States with 
lower  minimum  cover  requirements  to  avail  themselves  of  cheaper  motor  insurance  premiums. 
These  vehicles  could  then  be  circulating  across  the  European  Union,  and  potentially  generate 
claims in Member States where the domestic minimum cover requirement is much higher.   

Member  States  with  lower  minimum  amounts  of  cover  are  expected  to  have  lower  levels  of 
MTPL premiums, but as demonstrated in Figure 5.1, there is not a direct relationship between the 
average premiums and the minimum amounts of Member States. However, article 14 (b) of the 
Directive  foresees  that    in  case  of  an  accident,  the  insurer  should  provide  for  amount  of  cover 
which  is  obligatory  in  the  legislation  where  the  vehicle  is  based  or  the  accident  took  place, 
whichever  is  the  highest.  As  an  effect  of  competition  and  market  forces,  a  tendency  for  an 
upward alignment of MTPL premiums exists. Insurers might adjust premiums taking into account 
the  higher  level  of  claims  due  to  cross  border  accidents.  Consequently,  market  forces  could 
ensure alignment of premiums and mitigate risks of regulatory arbitrage.  

Figure 5.1: average MTPL premiums by MS 

98   EIOPA-17-691  Letter  on  cross-border  motor  insurance  issues  under  Directive  2009/103/EC,  30 

October 2017 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

5.1.6  Checks on insurance of vehicles  

The current MID contains a paradox for cross-border traffic. The MID requires drivers to 
obtain  third  party  liability  motor  insurance  and  requires  Member  States  to  enforce  this 
obligation. Therfore, the Directive stipulates that the Member States shall take effective 
action  to  ensure  that  civil  liability  is  covered  by  insurance.  At  the  same  time,  the 
Directive also prohibits checking of the MTPL cover of vehicles moving across-borders. 
This  aims  to  facilitate  unhindered  cross-border  traffic  and  ensure  free  movement  of 
persons and goods, a key cornerstone of the internal market. In particular manual checks 
of  MTPL  cover  at  the  borders  would  be  very  time-  consuming  and  hinder  the  free 
movement  of  persons  and  goods.  As  a  consequence,  vehicles  circulating  for  a  longer 
period  in  a  different  Member  State  than  the  one  where  they  are  registered  may  remain 
unchecked  for  compulsory  motor  insurance,  which  makes  uninsured  driving  easier  in  a 
cross-border context.  

According to,  the Association of European Vehicle and  Driver Registration Authorities 
(EREG)99, uninsured driving is an important problem within the EU. The cost has been 
estimated by EREG at € 870 million in claims in 2011 for the EU as a whole. As third-
party  motor  liability  insurance  is  compulsory  for  all  vehicles  within  the  EU,  uninsured 
driving  negatively  affects  a  wide  range  of  stakeholders  including  victims  of  accidents, 
insurers, guarantee funds and motor insurance policyholders.   

As outlined in the EREG report, uninsured driving is a problem both at national level and 
at  the  European  level.  At  national  level,  article  3  of  Directive  2009/103/EC  obliges 
Member States to "take all appropriate measures to ensure that civil liability in respect 

99  EREG,  FINAL  REPORT,  Topic  Group  XI  on  tackling  uninsured  driving,  8  April  2013.  www.ereg-

association.eu 

126 

 
 
 
                                                            
of the use of vehicles normally based in its territory is covered by insurance".  While the 
Directive  does  not  prescribe  which  actions  should  be  taken,  Member  States  have  the 
obligation to take effective action to reduce risks of unisured driving. Uninsured driving 
is also problem at EU level as uninsured vehicles are driving not only in Member States 
where they are registered but also in other Member States.  

For the reasons mentioned above, the current MID, which prohibited insurance checks at 
EU-borders  to  ensure  the  free  circulation  of  vehicles,  negatively  affects  an  effective  
implementation of the insurance obligation. Furthermore, new techological developments 
are  available  which  could  increase  possibilites  for  insurance  checks  without  stopping  a 
vehicle at the border.  

5.1.7 Other areas of the evaluation 

 

insurance of dispatched vehicles 

Article  15  of  the  MID  on  dispatched  vehicles  was  introduced  in  order  to  facilitate 
consumers  to  find  MTPL  insurance  for  a  vehicle  that  has  to  be  dispatched  from  one 
Member State to another. To that end article 15 set out that the Member State of destination 
is the Member State where the risk is based, even though the vehicle will not yet be formally 
registered there. When a person buys a vehicle in another Member State, that person has the 
maximum  of  30  days  to  register  his/her  car  in  his/her  home  Member  State  and  to  arrange 
suitable MTPL insurance. 

However,  accordining  to  the  responses  to  the  public  consulation,  a  number  of 
stakeholders have indicated that this problem would still exist. In particular, a number of 
practical issues and gaps in claims handling in the event of an accident with a dispatched 
vehicle had been identified.  

A gap that occurred in practice is the lack of a clearly identifiable insurer who would see 
himself  responsible  for  receiving  a  claim  for  compensation  in  the  event  of  an  accident 
involving a dispatched vehicle in the Member State of origin. In such a case, the vehicle 
is insured with an insurer in the Member State of destination, which means that a victim 
in the Member State of origin would have to address a claim to the insurer in the Member 
State of destination.  The victim  may however  not  address a claim to  the Bureau  of the 
Member State of origin since the vehicle is registered in the Member State of origin and 
the  Bureau  of  the  Member  State  is  only  competent  for  foreign  vehicles.  Finally,  the 
victim (when resident in the Member State of origin) is not entiteled to address a claim to 
the Compensation Body of the Member State of origin either since the accident has not 
taken  place  in  another  Member  State  than  the  victim’s  Member  State  of  residence.  It 
should  be  further  monitored  what  is  the  extent  of  the  issue  of  insurance  of  dispatched 
vehicles to determine the most appropriate approach to overcome any gap.  

  A requirement Member States to set up Information Centres. 

The  MID  requires  Member  States  to  set  up  information  centres  to  ensure  that  information 
concerning any accident involving a motor vehicle is made available promptly. In particular, 
they should inform victims on claims representatives of insurers and provide information on 
the insurance cover of a vehicle.  

127 

 
 
 
However, under the Motor Insurance Directive Information Centres are not required to give 
any information on the insurance situation of vehicles dispatched from one Member State to 
another  in  accordance  with  Article  15.  According  to  some  stakeholders,  it  would  be 
beneficial  for  victims  of  motor  accidents,  if  information  centres  would  provide  this 
information.  Furthermore, a register on the insurance data of dispatched vehicles maintained 
by  Information  Centres  would  be  helpful  for  the  purpose  of  prevention  of  insurance  fraud. 
Therefore, it should be further monitored what is the magnitude of this issue and the impact 
on injured parties and if benefits would outweigh the costs of setting up such a register.  

  Protection of vistors 

Compared  to  the  Green  Card  system,  which  protects  victims  against  accidents  caused  by 
visiting drivers, MID also provides protection for victims of an accident in countries where 
they are not residents (visitors). To that end, Member States must require insurers from other 
Member  States  to  appoint  claims  representatives.  Furthermore,  they  are  required  to  set  up 
information  centres that  facilitate tracking of drivers and compensation  bodies that provide 
assistance in cases where the victim cannot co-operate effectively with the insurer. 

The introduction of the Fourth Motor Insurance Directive was an important improvement 
for  the  situation  of  visiting  victims.  The  protection  scheme  does  however  not  offer  the 
same guarantees as they exist within the Green Card system.  

The Motor  Insurance  Directive provides for an  enhanced protection scheme  for injured 
parties  sustaining  loss  or  injury  from  an  accident  as  referred  to  in  Article  20  of  the 
Directive, but the Directive does not provide for any guarantee system comparable to the 
one of the Green Card System. Consequently, claims representatives pay much attention 
to the certainty of being reimbursed by an insurer before to start compensating a victim. 
Therefore, they usually await the advanced payment of the insurer before compensating 
the injured party.  

In  the  interest  of  victims,  it  might  be  useful  to  consider  the  guaranteeing  of 
compensations paid by claims representatives to injured parties. Nevertheless, this issue 
should be further monitored to determine the frequency and magnitude of this issue and 
the impact in terms of delay of reimbursement for injured parties. 

  Direct right of action against guarantee funds 

Article 18 established the right of injured parties for direct action against the insurance 
undertaking that should cover the aftermath of an accident. However, such a right does 
not exist against guarantee funds. This means that there is more difficult access to justice 
for those injured parties that incurred damages in accidents that concerned uninsured or 
untraced vehicles. This issue should be further monitored to determine the magnitude of 
this problem and the impact on injured parties.  

  Autonomous and semi-autonomous vehicles and electric bikes 

An  analysis  to  what  extent  new  technological  developments  such  as  autonomous  and 
semi-autonomous  vehicles  and  electric  bikes  are  effectively  covered  by  the  MID  is 
provided in section 6.4 on relevance.   

128 

 
 
 
  
5.2. Efficiency 

The costs and benefits of the MID were only assessed on a qualitative basis due to a lack of 
quantitative  data  revealed  in  the  evaluation  (research  and  stakeholder  input),  as  explained 
under limitations of methodology. 

5.2.1. Benefits for victims of motor insurance accidents, insurers policyholders 

The evaluation showed a broad consensus of stakeholders that the MID contains a number of 
benefits in particular for victims of motor accidents. MID ensures a high level of protection 
across the EU, based on common elements. 

The main benefits of the MID for the different stakeholders are outlined in the table below: 

Table 11: assessment of benefits of the MID for distinct stakeholder groups 

Type of stakeholder 

Benefits of the MID 

For  victims  of  motor 
accidents: 

 

 

 

 

 

 

 

 

the  MID  provides  for  the  protection  of  victims  across  the  EU 
based  on  common  minimum  amounts  of  cover  for  personal 
injury  and  material  damage,  efficient  procedures  for  handling 
of claims and with appropriate guarantees for a swift payment 
of damages. 
It  ensures  that  both  personal  injuries  and  material  damage  are 
covered by insurance. 
It  provides  for  specific  protection  for  vulnerable  road  users, 
such as pedestrians and cyclists 
It ensures swift reimbursement of victims, even in cases where 
the  driver  was  not  insured  or  in  cases  of  untraced  drivers 
through national compensation bodies, in the Member State of 
residence of the victim. 
It  provides  a  network  of  claims  representatives  in  all  EU 
Member States to ensure that victims have a point of contact in 
their member state of residence even if the accident occurred in 
another Member State.  
It  protects  victims  against  abusive  exclusion  clauses  in 
insurance contracts 
It  provides  the  direct  right  of  action  against  an  insurance 
undertaking covering the person responsible for the accident 
It  ensures  protection  for  "visiting  victims"  who  travel  across-
borders. 

For policyholders: 

  The  MID  ensures  the  free  circulation  of  vehicles  without 

 

 

 

border checks on MTPL insurance.  
It  ensures  that  third  party  liability  of  the  policyholder  is 
covered  in  case  of  accident  within  the  whole  EU  territory 
without the need for specific MTPL insurance in each different 
Member State on the basis of a single premium.  
It ensures that the minimum level of cover and procedure is the 
same across the EU facilitating cross border circulation.  
It  ensures  that  policyholders  do  not  need  to  carry  the  Green 
Card on them when crossing the border 

129 

 
 
 
 
For insurers: 

For Member States: 

 

 

 

 

 

 

 

It sets out clear procedures and obligations in case of accidents 
with an insurer of another Member State; 
It set up principles of compensation for situations that involve 
uninsured or untraced vehicles 
It creates overall legal certainty ensuring an efficient handling 
of claims across the EU.  
It provides guarantees to allow free circulation of the vehicles 
across the EU without the need for imposing border checks on 
motor insurance.  
It sets clear procedures and obligations on risk sharing in case 
cross  border  accidents 
including  cross-border  accidents 
involving an uninsured driving or an untraced vehicles 
It ensures an efficient handling of claims through the setting up 
of  national  compensation  bodies  for  accidents  involving 
visiting victims. 
It  sets  minimum  standards  for  the  protection  of  citizens  when 
visiting another Member State  

5.2.2. Costs for the setting up of the different bodies: (qualitative assessment) 

The  setting-up  of  the  different  institutions  required  by  MID  created  costs  for  stakeholders. 
These  institutions  include  compensation  bodies,  Guarantee  Funds,  Claims  representatives 
and  Information  centres  as  described  in  the  box  below.  The  main  elements  are  assessed 
qualitatively  and  considered  to  be  proportionate  to  the  objectives  of  the  MID.  The  public 
consultation showed no reports from stakeholders that these requirements were excessively 
costly or burdensome.  

Box 8: the institutional set-up of the MID 

The Directive requires to set up a number of bodies:  

  Compensation Bodies (CB): For accidents caused in another Member State than the one 

of the victim’ residence, the CB will intervene: 

       - In the event an insurance company has not nominated a Claims Representative (CR) in 
the victim’s Member State 

 - In the event the insurance company or its CR has not provided a timely and sufficient reply 
to  a claim;  

-In the event a vehicle having caused an accident cannot be identified or it is impossible to 

identify the insurer of the vehicle. 

  Guarantee  Fund  (GF):  compensates  the  consequences  of  an  accident  caused  by  an 

unidentified or an uninsured vehicle. 

  Claims  Representatives  (CR):  Every  insurer  offering  MTPL  insurance  in  an  EEA 
Member State has to nominate in each other Member State a CR. The CR is entitled to 
receive,  handle  and  settle  claims  addressed  by  a  victim  having  his  residence  in  the 

130 

 
 
  
 
 

Member State where the CR is established and related to a road traffic accident that has 
occurred in another Member State than the State of the victim's residence. 
Information Centres (IC): In order to enable a victim of a road traffic accident to seek 
compensation,  each  Member  State  has  an  IC,  responsible  for  keeping  registers  and 
providing  information  about  -  amongst  others  -registration  numbers  (license  plates)  of 
vehicles, insurance cover of these vehicles and the CR nominated by different insurance 
companies. 

At  present  data  on  the  costs  associated  with  the  set-up  and  operation  of  the  individual 
bodies  is  not  available.  However  there  are  some  data  on  the  total  financial  volume  of 
Guarantee funds: 

Table 12: Cashflows from claims covered by Guarantee Funds in 2011 

Total  amount  of  claims  paid  by  Guarantee  Funds 
on uninsured driving in 2011 

Total  amount  of  claims  paid  by  Guarantee  Funds 
for untraceable drivers in 2011 

EUR 843,905,416 

EUR 318,280,550 

Total  amount  of  claims  handled  by  Guarantee 
Funds  in 2011 

EUR 1, 153,185,966 

Source: CoB position paper on uninsured driving, position paper, 12/09/2012 

5.3. Coherence 

As part of the fitness check, the overall coherence of the MID within the EU Framework 
and the interlinkage of the MID with the international Green Card system were assessed.  

5.3.1 Consistency of the MID within the overall EU framework.  

There  is  no  direct  links  with  other  legislation  apart  from  the  Solvency  II100  which 
establishes conditions for the conduct of business on a cross-border basis. In this context, 
Solvency II provides two more instruments that seek to achieve a high level of protection 
of victims, namely:  

1)  The  obligation  for  the  insurer  to  become  member  of  the  bureau  of  insurers  of  the 
receiving Member States and contribute towards the guarantee fund101. This ensures the 
compensation of victims in the event of accidents with untraceable or uninsured drivers 
even in case the MTPL insurance has been provided to a policyholder on a cross-border 
basis.  

100   Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the 

taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II)  

101   Article 150 of Directive 2009/138/EC ( Solvency II) 

131 

 
 
 
                                                            
2)  The  obligation  to  ensure  non-discriminatory  treatment  of  claims102  and  the 
requirement  to  appoint  a  representative103.  The  representative  is  required to  "collect  all 
necessary  information  in  relation  to  claims,  and  shall  possess  sufficient  powers  to 
represent  the  undertaking  in  relation  to  persons  suffering  damage  who  could  pursue 
claims, including the payment of such claims, and to represent it or, where necessary, to 
have it represented before the courts and authorities of that Member State in relation to 
those  claims.  That  representative  may  also  be  required  to  represent  the  non-life 
insurance undertaking before the supervisory authorities of the host Member State with 
regard  to  checking  the  existence  and  validity  of  motor  vehicle  liability  insurance 
policies."  104  These  provisions  ensure  the  appropriate  handling  of  claims  for  insurers 
operating on a cross border basis.  

These provisions are deemed necessary in view of the increasing mobility of citizens of 
the  Union  and  the  fact  that  motor  liability  insurance  is  increasingly  being  offered  on  a 
cross-border  basis.  Consequently  these  provisions  are  considered  coherent  with  the 
objectives of the MID.  

6.3.2 Interlinkage between the MID and the Green Card System.   

The international motor insurance framework applicable in the EU is not fully regulated 
by  EU  institutions.  There  are  three  core  elements  that  inseparably  underpin  its 
functioning:  national  civil  law,  the  Green  Card  system  and  the  EU  motor  insurance 
directive: 
Figure 5.2: The EU third party liability motor insurance framework 

EU motor insurance framework 

National Civil 
Law 

Green Card 
System 

EU motor 
insurance 
Directive 

(Directive 
2009/138/EC) 

102   Article 151 of Directive 2009/138/EC ( Solvency II) 

103   Article 152 of Directive 2009/138/EC ( Solvency II) 

104   Article 152 of Directive 2009/138/EC ( Solvency II) 

132 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
 
a) National civil law 
First,  it  is  national  civil  law  that  determines  the  very  scope  of  civil  liability,  levels  of 
compensation and the types of injured parties covered. 

b) The Green Card system  
The Green Card is an international certificate of third party liability insurance that makes 
it possible for travellers to cross borders without having to buy supplementary insurance. 
The system is run by a Council of Bureaux and was set up in 1949 under the auspices of 
the  United  Nations  Economic  Commission  for  Europe  (UNECE).  There  are  three 
categories of Green Card Members: EEA Member States, Members under section III of 
the Internal Regulations (Andorra, Croatia, Serbia and Switzerland) and standard Green 
Card  Members.  Vehicles  from  EEA  Member  States  and  Section  III  States  can  travel 
freely between the relevant territories even without the Green Card as the number plate 
of such Member State is presumed proof of insurance.  
The  Green  Card  system  (explained  in  Box  1),  sets  out  of  system  of  cross-border 
guarantees  and  compensation;  this  system  is  governed  by  a  series  of  multilateral 
agreements between the bureaux, guarantee funds, compensation bodies and information 
centres.  

c) The Motor Insurance Directive 

Third,  Directive  2009/103/EC  compared  to  the  Green  Card  system  provides  the 
necessary  upgrades  at  EU  level  (in  terms  of  e.g.  putting  in  place  minimum  amounts  of 
cover, stating that both personal injuries and material damage is covered, banning unfair 
exclusion  clauses  vis  a  vis  victims  and  putting  in  place  facilities  to  protect  visiting 
victims) thereby achieving a high degree of convergence between the Member States in 
terms of protection of victims of traffic accidents.  

Although  the  overall  system  seems  to  be  complex,  it  does  not  much  differ  from  other 
areas  of  law  in  the  EU.  Relevant  legal  relations  are  usually  governed  by  a  mixture  of 
layers  are 
rules  originated 
complementary to each other.  

from  different  actors.  Furthermore, 

the  different 

5.4. Relevance 

5.4.1. Economic context and importance of MTPL insurance 

The  data  from  the  CARE  annual  report  of  2016  shows  a  downward  evolution  of  accidents 
and fatalities which stabilised in 2014. It also shows a relationship between road accidents, 
fatalities and injured.  In 2014 more than 1 million road accidents occurred  in the EU with 
more  than  25.000  road  fatalities  and  approximately  1.4  million  injured.    Even  if  there  is  a 
decreasing trend in road fatalities, this figure shows that third party liability motor insurance 
will continue to be relevant for the protection of victims of motor accidents in the following 
years.   

133 

 
 
 
 
 
 
 
 
 
a) Road fatalities. 

The data from the CARE annual report of 2016 shows that there is a downward evolution of 
accidents  and  fatalities  which  stabilised  in  2014.  It  also  shows  a  relationship  between  road 
accidents, fatalities and injured.  In 2014 there were more than 1.million road accidents in the 
EU and more than 25.000 road fatalities and approximately 1.4 million injured.  Even if there 
is  a  decreasing  trend  in  road  fatalities,  this  figure  that  third  party  liability  motor  insurance 
will continue to be relevant for the protection of victims of motor accidents in the following 
years (see Section 1 of Annex 4, figures 1.1, 1.2, 1.3 and 1.4).   

b) Key economic data of the Motor Insurance Market: 

According  to  Insurance  Europe,  an  industry  association  of  insurers,  the  total  amount  of 
premiums in 2014 amounted to EUR 62,5 Billion and represented approximately 57 percent 
of total motor insurance premiums in the EU105. As shown in figure 2.2 of Annex 4 there are 
an increasing number of vehicles circulating within the EU. However, the number of claims 
has decreased in 2014 to 15.9 million as shown in figure 5.3. Furthermore, the cost of claims 
has  gradually  increased  and  now  reaches  approximately  EUR  3200  per  claim  as  shown  in 
figure 4.1.in Annex 4. In addition, figure 3.1 of Annex 4 shows the evolution of the average 
MTPL  premiums  within  the  EU  which  has  been  stabilize  since  2009  and  remains    below 
EUR 250 per year in 2014.   

Figure 5.3 : Evolution of number of MTPL claims (2004-2014) 

 Source: European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

5.4.2. Need for the protection of victims of motor accidents 

 As long as there is free circulation of vehicles, accidents of motor insurance will occur and 
victims requiring compensation of personal injury and material damage. Even if there will be 

105   European Motor Insurance Markets Addendum, Insurance Europe, June 2016 

134 

-6%-4%-2%0%2%4%6% 13 000 000 14 000 000 15 000 000 16 000 000 17 000 000 18 000 00020042005200620072008200920102011201220132014Number of MTPL claimsGrowth rate, (%) 
 
 
                                                            
technological  developments  reducing  the  number  of  motor  accidents,  there  will  remain  a 
residual  number  of  damage  requiring  compensation.  Consequently  the  MID  will  remain 
relevant  for  the  protection  of  victims  of  motor  accidents  in  terms  of  convergence  of 
protection between the Member States.  

5.4.3. Need for MID for the free circulation of persons and vehicles 

The  free  circulation  of  persons  and  vehicles  within  the  EU  is  one  of  the  key  cornerstones 
enshrined  in  the  EU  treaty.  To  ensure  that  free  circulation  is  possible,  the  MID  abolished 
obtrusive border checks for motor insurance. This allows for the easy crossing of borders for 
EU citizens. Consequently the MID remains relevant for the free circulation of persons and 
vehicles.  

5.4.4.  Impact  of  new  technological  developments  on  the  MID,  autonomous 

vehicles 

a) Electric bicycles 

In  principle  new  types  of  motor  vehicles,  such  as  electic-bicycles  (e-bikes),  segways, 
electric  scooters,  fall  within  the  scope  of  the  Directive.  The  use  of  these  new  types  of 
electric  motor  vehicles  in  traffic  has  the  potential  to  cause  victims  in  accidents  which 
need to be protected and reimbursed swiftly.  

However,  as  part  of  the  public  multiple  association  representing  the  electric  bike  (e-
bikes) industry argued that requiring third party liability insurance could undermine the 
uptake  of  e-bikes.  To  avoid  that  these  new  types  of  vehicles  are  subject  to  MTPL,  the 
current directive allready provides Member States with the power to exempt them from 
MTPL.  The  national  guarantee  funds  would  bear  the  costs  to  reimburse  victims  of 
accidents with these new types of "vehicles".  

Following the principle of subsidiarity, the most proportionate approach, which provides 
for the highest level of protection of victims is  that  Member  States would make  use  of 
their powers to exempt these vehicles from MTPL insurance in accordance with article 5 
of  the  Motor  Insurance  Directive.  Therefore,  there  is  no  EU  action  required  to  address 
this topic. This allows for protecting victims of motor accidents in accordance with the 
rules set out in the Motor Insurance Directive, and at the same time provide flexibility at 
national  level  to  exempt  such  new  electric  vehicles  in  accordance  with  article  5  of  the 
Directive from compulsary motor insurance on the condition that national compensation 
bodies  would  ensure  compensation  of  claims  due  to  accidents  with  such  new  motor 
vehicles.   

Autonomous vehicles 

As outlined by the GEAR106 report, it can be expected that technological developments in 
the following years will lead to an uptake of autonomous and semi-autonomous vehicles.  

106   GEAR 2030,  High  Level  Group  on  the  Competitiveness  and  Sustainable  Growth  of  the  Automotive 
at: 
Final 

the  European  Union, 

report,  October 

available 

Industry 

2017, 

in 

135 

 
 
 
                                                            
 
The  reports  projects  that  by  2025  autonomous  vehicles  could  represent  20  percent  of 
global  vehicles  sold.  The  report  also  estimates  that  there  will  be at  global  level  and  44 
million vehicles by 2030. In addition, the report projects considerable impacts in terms of 
business models. One particular impact of relevance for third party liability insurance is 
that  autonomous  vehicles  have  the  potential  to  drastically  reduce  road  fatalities  which 
currently mainly occur due to human error107.   

Box 9: Different levels of developments of autonomous vehicles 

The GEAR report outlined that automated vehicles are vehicles that can replace the 
driver for some or all of the driving tasks.  The society of autonomous engineers 
(SAE)108, identifies six different stages in the development of driving automation, from 
no assistance (SAE level 0 until full automation (SAE level 5): 

  SAE  Level  0:  No  assistance:  the  full-time  performance  by  the  human  driver  of  all 
aspects  of  the  dynamic  driving  tasks  regardless  of  any  technological  warning 
systems.  

  SAE Level 1: Driver assistance: specific execution by a driver assistance system of 
either  steering  or  acceleration/deceleration  while  the  human  driver  performs  all 
remaining aspects of the dynamic driving tasks. 

  SAE  level  2:  Partial  Automation:  Vehicles  acting  automatically  on  the  brakes,  the 
accelerator or/and the steering control under the constant supervision of the driver  
  SAE Level 3: Conditional Automation: specific performance by an automated driving 
system of all aspects of the dynamic driving task with the expectation that the human 
driver will respond appropriately to a request to intervene 

  SAE Level 4: High automation:  automated vehicles allowing the driver to perform 

secondary tasks.  

  SAE level 5: High automation. Vehicles able to drive autonomously. 

 

(SAE level 5). Such  in any traffic conditions are not expected to be available before 
2030 except for testing. 

 For the purpose of this report SAE level 2 until 4 can be considered semi-autonomous 
vehicles and only SAE level 5 is considered fully autonomous vehicles. 

https://ec.europa.eu/growth/content/high-level-group-gear-2030-report-on-automotive-
competitiveness-and-sustainability_en 

107   Multiple studies exist on accident causation sources, see GEAR 2030, referred to in footnote 98. 

108   https://www.sae.org/misc/pdfs/automated_driving.pdf. 

136 

 
 
 
 
 
 
 
 
 
 
 
   
                                                                                                                                                                                 
According to the GEAR report, SAE "Level 2" Vehicles, acting automatically on the 
brakes, the accelerator or/and the steering control under the constant supervision of the 
driver are already available on the EU market.  

According to the European Road Transport Research Advisory Council (ERTRAC) 109, a 
platform regrouping stakeholders within the road transport sector, automated vehicles 
allowing the driver to perform secondary tasks (SAE levels 3-4) should be available by 
2020 on the EU market for a limited number of driving situations. Such driving situations 
could include e.g. automated cruising on the motorway or urban shuttles for dedicated 
trips.  
The use of SAE level 5 vehicles under traffic conditions are not expected to be available 
on the market before 2030, except for testing110.  

 The  question  on  the  future  impact  on  third  party  civil  liability  insurance  arises  and, 
consequently,  whether  the  Motor  Insurance  Directive  is  fit  to  deal  with  these 
technological  developments.  In  particular,  the  Directive  requires  all  vehicles  to  obtain 
mandatory  third  party  liability  motor  insurance  with  a  view  to  ensure  a  high  level 
protection of victims of traffic accidents.  This obligation also applies to autonomous or 
semi-autonomous vehicles. A possible rationale would be the continuous need to protect 
and  compensate  victims  of  accidents  involving  autonomous  and  semi-autonomous 
vehicles circulating within  the EU. Even if there is  considerable uptake of autonomous 
vehicle and semi-autonomous and the potential positive effect on reducing road fatalities 
and motor accidents materialises, there will remain a residual amount of traffic accidents 
and  injured  parties.  This  is  can  be  reasonably  expect  as  current  accidents  with 
autonomous  and  semi-autonomous  vehicles  have  shown  that  despite  technological 
developments accidents can  occur. As a consequence there will remain victims of road 
traffic accidents with personal injuries and material damage to be compensated.  

It is important to notice that it currently does not matter whether the policyholder is also 
the  "driver"  of  the  vehicle".  An  accident  may  be  caused  by  a  driver  who  is  neither  the 
owner  of  the  vehicle  and  nor  the  policyholder  of  the  MTPL  insurance  linked  to  the 
vehicle,  but  still  the  victim  of  the  accident  may  claim  compensation  under  the  MID.. 
Consequently,  for  an  autonomous  or  semi-autonomous  vehicles,  for  the  purpose  of  the 
MID  the  absence  or  semi  absence  of  a  driver  is  not  relevant.  The  owner  who  has 
registered  the  vehicle  is  required  to  obtain  a  MTPL  insurance  and  it  is  the  MTPL 
insurance which will ensure the compensation of the victims in the event of an accident. 
In a second step, and in the event of a potential deficient functioning of the self-driving 
car, the insurer may obtain recourse against the manufacturer.    

109 

ERTRAC 

Automated 

Driving 

Roadmap: 

http://www.ertrac.org/uploads/images/ERTRAC_Automated_Driving_2017.pdf 

110    GEAR  2030,  High  Level  group  on  the  on  the  Competitiveness  and  Sustainable  Growth  of  the 

Automotive Industry in the European Union, Final report, October 2017 

137 

 
 
 
 
                                                            
The  public  consultation  supported  the  view  that  cars  using  self-driving  technologies 
should  continue  to  be  covered  by  the  MID.    In  particular  victims  should  continue  to 
obtain the same level of protection as victims of regular vehicles.  

It  is  not  contested  by  any  stakeholder  group  that  autonomous  or  semi-autonomous 
vehicles (often referred to as "driverless vehicles") currently fall within the scope of the 
Directive.    A  question  raised  in  the  consultation  was  however,  whether  changes  to  the 
current  system  should  be  envisaged.  All  groups  of  stakeholders  believed  that  such  a 
change would at this stage not be justified. It was widely felt that MTPL insurance under 
the Directive ensures a rapid compensation of victims of accidents, and any other system, 
such  as  placing  liability  with  the  manufacturer  of  the  vehicle,  would  risk  slower 
compensation or lower cover or both. It was pointed out that in the event of an accident 
caused by a self-driving vehicle and due to a manufacturing fault, the MTPL insurer of 
the vehicle (after compensating the victim) may claim recourse from the manufacturer. 

Finally,  stakeholders  held  that  the  uptake  of  autonomous  vehicles  would  take  a 
considerable  amount  of  time  and  it  would  be  still  uncertainty  about  the  market 
penetration. However, the technological developments and their possible implications for 
the MID should be continuously monitored.  

Another development affecting car insurance in the following years is the proliferation of 
data  generated  by  autonomous  cars.  Some  insurers  are  developing  pay-as-you-drive 
(PAYD)  car  insurance  whereby  the  costs  are  dependent  upon  type  of  vehicle  used, 
measured  against  time,  distance  and  place.  Thanks  to  more  advanced  sensors  and 
intelligence  systems  within  autonomous  cars  for  usage  monitoring,  drivers  could  have 
flexible premium fees, and have optional value-added services such as tracking of stolen 
vehicles. 

5.5 EU Added value 

The  objective  of  the  MID  is  to  ensure  a  high  level  of  protection  of  victims  of  traffic 
accident and at the same time ensure the free movement of persons and vehicles across-
borders. This can only be achieved by EU Action. At the same time, only action at EU 
level can ensure a level playing field in terms of protection of victims of traffic accidents 
across  the  EU.  Furthermore,  only  the  EU  can  set  minimum  standards  of  protection  of 
victims and enhancing protection of policyholders when moving across-borders.  

The evaluation shows that solely MID can ensure the free circulation of motor vehicles 
within the EU, based on a single MTPL insurance for policyholders. Only EU action can 
create  the  instruments  and  institutions  necessary  to  ensure  more  convergence  of 
protection of victims. In particular, only common minimum amounts of cover for injury 
and material damage can ensure an equal protection of victims across the EU. 

EU action is also required to introduce an efficient and uniform process for the handling 
of claims. Regardless in which Member State an accident happens, MID provides victims 
to  benefit  from  an  established  process  in  the  Member  State  of  residence  based  on  a 
claims representative network across the EU.  EU action is also necessary to guarantee 
the  EU-wide  compensation  of  victims  from  uninsured  and  untraceable  drivers.  For 
insurers,  EU  action  facilitates  the  cross-border  provision  of  MTPL  insurance  based  on 
common principles and procedures.  

138 

 
 
Building on the international Green Card system, the MID provides for a higher level of 
legal certainty for all stakeholders including victims, insurers, policyholders, bureaux and 
compensation funds.  

6. 

CONCLUSIONS  

6.1. Conclusions of the evaluation 

A. Effectiveness of the Directive:  

Regarding  most  of  the  aspects  of  the  Directive  examined  in  this  evaluation,  it  can  be 
concluded that the Directive is overall fit for purpose and broadly achieves its objectives 
of ensuring a high level of protection of victims of motor accidents and allowing the free 
circlation of vehicles without border checks.  

Nevertheless, the evaluation identified  a number of challenges and obstacles as regards 
the effectiveness of the Directive which merit futher reflection and could result in policy 
actions.  This  conclusion  applies  to  the  following  elements  of  the  Directive  included  in 
this evaluation: 

  The compensation of victims in case of insolvency of the insurer is not addressed 
by  the  Directive.  As  a  consequence  victims  are  insufficiently  protected  in 
comparison  to  similar  situations  such  as  accidents  involving  uninsured  or 
untraceable drivers; 

  Differing  national  implementation  of  the  scope  of  application  of  the  Directive 
following three CJEU rulings had been identified as a source for legal uncertainty 
affecting adequate protection of victims; 

  The levels of minimum coverage in cases of personal injury are not implemented 
in  a  harmonised  way,  creating  uneven  protection  of  victims  across  Member 
States.  

  The  prohibition  of  all  border  insurance  checks,  including  unobtrusive  ones,  has 

created difficulties to detect uninsured driving in cross-border situations.  

 

 

Information  on  claims  history  is  not  available  in  standardised  form,  nor  it  is 
assured  that  such  information  is  used  in  cross-border  situations  in  a  non-
dicriminatory manner.    

Inconsistencies in some terminology and definitions are creating legal uncertainty 
in specific cases. 

Other  aspects  of  the  Directive  were  indicated  by  some  stakeholders  as  possible  issues, 
but  they  did  not  provide  sufficient  evidence  for  a  need  for  policy  intevention.  These 
issues are: 

  An  allegedly  insufficient  mechanism  for  the  protection  of  victims  of  motor 
vehicle accidents in a Member State other than their Member State of residence 
(visiting victims); 

139 

 
 
  The power of Member States to exempt categories of vehicles or activities from 
the requirement for MTPL insurance, subject to the coverage of accidents caused 
by such exempted vehicles by the national guarantee fund; 

 

Insurance of dispatched vehicles. 

As regards all other aspects of the Directive are concerned, no issues were identified in 
respect to their effectiveness.  

B.  Efficiency:  In  light  of  feedback  received  from  stakeholders  during  the  public 
consultation,  the  evaluation  concludes  that  the  Directive  is  efficient  in  achieving  its 
objectives. It set up a architecture of national bureaux, compensation bodies, and national 
information  centres  and  it  requires  insures  to  have  a  network  of  claims  representatives 
throughout  the  EU.  On  the  other  hand,  there  is  no  evidence  of    any  excessive  costs  or 
administrative burden imposed by the Directive. A simplification of the implementation 
architecture of the Directive would prejudice its objectives. 

C.  Coherence:  The  evaluation  demonstrated  that  the  Directive  is  coherent  with  other 
legislation,  in  particular  Solvency  II  (which  contains  specific  provisions  on  motor 
insurance). Furthermore, it is consistent with the overall legislative framework on MTPL 
insurance applicable in the EU consisting also of national civil law and the Green Card 
System  at  international  level,  providing  an  additional  layer  at  EU  level  ensuring  a 
uniform protection for victims and the free circulation of vehicles within the EU. 

D.  Relevance:    Given  the  importance  of  free  circulation  of  vehicles  in  the  EU  and  the 
continuous increase in numbers of vehicles an EU framework for MTPL motor insurance 
will  continue  to  be  needed.  The  evaluation  also  looked  at  new  technological 
developments  such  as  autonomous  vehicles  and  e-bikes.  It  concluded  that  the  existing 
framework is at this stage appropriate to address these developments, and such vehicles 
should not be excluded from the scope of the legislation at EU level.  

E. EU Added Value: only EU action can ensure the free circulation of vehicles based on 
a single third party liability insurance and at the same time allow for the equal and high 
protection of victims of motor accidents across the EU.  

6.2 Possible follow-up actions 

As  a  follow-up  to  the  conclusions  of  this  report,  an  impact  assessment  is  prepared 
examining the policy options for intervention on the aspects of the Directive where the 
need  for  action  has  been  identified.  These  four  aspects,  which  form  the  subject  of  a 
distinct impact assessment, are the following: 

  Unobtrusive checks on insurance of vehicles to address uninsured driving; 

  Fully harmonised minimum amounts of cover; 

  Transferability  of  information  about  claims  history  for  citizens  moving  across 

borders; 

140 

 
 
The impact assessment also provides analysis for the possible inclusion of an area which 
is  currently  not  part  of  the  Directive,  namely  the  compensation  of  victims  of  motor 
vehicle  accidents  where  the insurer  is  insolvent  and  incapable  of  paying  compensation. 
Cases  where  the insolvent  insurer provided  cross  border  insurance  will  be  of  particular 
relevance.   

An  annex  to  the  impact  assessment  explains  the  Commission's  reasons  for  wishing  to 
codify CJEU rulings on the scope of the Directive, thus ensuring consistent application of 
the Directive while allowing Member States the orderliness of a transposition process to 
achieve this. 

141 

 
 
 
 
 
ANNEX TO THE EVALUATION REPORT   

Overview of Repealed Directives with list of its successive amendments  

Council Directive 72/166/EEC 

(OJ L 103, 2.5.1972, p. 1) 
Council Directive 72/430/EEC 

(OJ L 291, 28.12.1972, p. 162) 
Council Directive 84/5/EEC 

(OJ L 8, 11.1.1984, p. 17) 
Directive 2005/14/EC of the European Parliament and Council 

(OJ L 149, 11.6.2005, p. 14) 
Council Directive 84/5/EEC 

(OJ L 8, 11.1.1984, p. 17) 
Annex I, point IX.F of the 1985 Act of Accession 

(OJ L 302, 15.11.1985, p. 218) 
Council Directive 90/232/EEC 

(OJ L 129, 19.5.1990, p. 33) 
Directive 2005/14/EC of the European Parliament and Council 

(OJ L 149, 11.6.2005, p. 14) 
Council Directive 90/232/EEC 

Only Article 4 

Only Article 1 

Only Article 4 

Only Article 2 

(OJ L 129, 19.5.1990, p. 33) 
Directive 2005/14/EC of the European Parliament and Council 

Only Article 4 

(OJ L 149, 11.6.2005, p. 14) 
Directive 2000/26/EC of the European Parliament and Council 

(OJ L 181, 20.7.2000, p. 65) 
Directive 2005/14/EC of the European Parliament and Council 

Only Article 5 

(OJ L 149, 11.6.2005, p. 14) 
Directive 2005/14/EC of the European Parliament and Council 

(OJ L 149, 11.6.2005, p. 14) 

142 

 
 
 
  
  
  
  
  
  
 
 
 
ANNEX 8: (CONFIDENTIAL*): FINANCIAL VOLUME OF INSOLVENCY CASES FALLING 
UNDER THE SUBJECT MATTER REGULATED BY THE 1995 AGREEMENT 

*This annex is confidential and not for publication in the final Impact Assessment report 
as it includes the names and confidential data of insolvent insurers and some insolvency 
cases are still ongoing. 

143 

 
 
  
 
ANNEX 9: (CONFIDENTIAL*) UNINSURED DRIVING IN THE EU 

*This annex is confidential and not for publication in the final Impact Assessment report 
as it concerns confidential responses from Member States.  

144 

 
 
 
 
ANNEX 10: INSOLVENCY:  VOLUNTARY AGREEMENTS BETWEEN MEMBER STATES  

 (Source: Council of Bureaux, COB text) 

1.  The  current  European  system  of  protection  of  victims  of  road  traffic  accidents 
where the insurer of the liable party becomes insolvent 

The  compensation  of  a  victim  where  the  MTPL  insurer  becomes  insolvent  may  get  an 
international dimension (exceeding the national borders) in two ways: 

  either the road traffic accident has a cross-border element (the tortfeasor or 

the victim travels abroad); 

  or the insurance undertaking bound to indemnify the victim operates across 
the borders under the Freedom to provide Services (FoS) or the Freedom of 
Establishment (FoE). 

The  first  dimension  calls  for  rules  on  victims’  protection.  The  second  dimension  – 
beyond the protection of victims – raises the issue of financial supervision and allocation 
of the financial burden of the insolvency since there are more countries concerned by the 
insurer’s activities. Rules governing these situations exist 

a) on the national level 

b) on EU level and 

c) on the international level, in the form of non-compulsory agreements created or 
administered by the Council of Bureaux. 

a) National rules  

On  the  national  level  (and  concerning  victims’  protection),  almost  all  countries  in  the 
European  Economic  Area  provide  for  the  intervention  of  the  Guarantee  Funds  (or 
analogous  bodies)  in  case  the  MTPL  insurance  undertaking  of  the  vehicle  causing  the 
accident  is  in  a  state  of  insolvency.  In  at  least  one  Member  State  (Sweden),  no 
intervention in case of insolvency is provided for at all. 

The  level  and  nature  of  intervention  differs,  however,  from  country  to  country  (the 
identity  of  the  competent  body,  the  scope  of  intervention  depending  on  the  type  of 
damage or injury) as well as the financing of these bodies. There are countries where the 
intervention  of  the  competent  bodies  in  case  of  insolvency  depends  on  whether  the 
defaulting entity is a local company or a foreign company operating there under FoS or 
FoE. 

b) EU rules  

In the European Union, the regulatory regime intended to prevent and tackle insolvency 
in the field of insurance primarily consists of the Solvency II Directive (2009/138/EC). 
The Directive introduces the principle of “home country control” (financial supervision 

145 

 
 
 
from  the  country  of  origin  of  the  undertaking).  However,  the  Directive  does  not  offer 
solutions for the compensation of victims once an insolvency has occurred. In the field of 
MTPL  insurance,  under  the  EU  Motor  Insurance  Directives,  road  traffic  victims  are 
protected  against  accidents  caused  by  uninsured  and  unidentified  vehicles  and  receive 
assistance  if  they  suffer  an  accident  when  visiting  another  country.  However,  the 
protection of victims against the insolvency of the liable party’s insurer is not explicitly 
provided for under European law. 

c) International rules. 

The Council of Bureaux (CoB) is the managing organisation of the Green Card system, 
the system of compulsory MTPL insurance created under the aegis of the United Nations. 
The CoB counts 47 Member Bureaux from 48 different countries. The CoB also provides 
secretarial  services  for  the  bodies  created  by  the  EU  Motor  Insurance  Directives 
(Compensation Bodies, Guarantee Funds and Information Centres). 

As regards the protection of victims of cross-border accidents, the CoB has created rules 
for  the  compensation  of  victims  in  cases  where  the  insurer  of  the  liable  party  becomes 
insolvent. This is the case for Green Card accidents as well as for accidents falling under 
the application of the codified Motor Insurance Directive (MID - 2009/103/EC). 

A Green Card accident scenario is as follows: a victim in country “A” is hit by a vehicle 
originating  from  country  “B”.  Under  the  rules  of  the  Green  Card  system  (Internal 
Regulations), the Bureau of country “A” compensates the victim even if the insurer of the 
liable party is insolvent, while Bureau “B” guarantees the compensation of Bureau “A”. 

An  MID  accident  scenario  is  the  mirror  image  of  a  Green  Card  accident:  the  victim 
travels abroad and is hit by a foreign vehicle in the visited country. If the insurer (or its 
claims representative) is dilatory in settling the claim (or the vehicle of the liable party is 
uninsured or unidentified), the victim is compensated by the Compensation Body of their 
country  of  residence  which  is  later  reimbursed  by  the  Compensation  Body/Guarantee 
Fund  of  the  country  of  establishment  of  the  insurer.  The  intervention  of  this  system  of 
protection is not foreseen in the case of insolvency of the insurer. The CoB has created a 
(non-compulsory) agreement to remedy this situation (see below). 

Regarding  the  other  international  dimension  (insurance  companies  operating  cross-
border  and  the  financial  implications  of  their  activities  or  default),  the  CoB  has  made 
several  attempts  to  find  solutions  in  the  form  of  (non-compulsory)  multilateral 
agreements. 

2. Description of voluntary agreements on insolvency 

The  Council  of  Bureaux  (CoB)  has  created  and  or  administers  three  agreements  in  the 
field  of  insolvency,  victims’  protection  and  cross-border  operation  of  insurers  that  are 
described below: 

PROTECTION OF VICTIMS 

146 

 
 
A) The 2008 AGREEMENT (Agreement between Compensation Bodies and Guarantee 
Funds in the event of insolvency of an insurance undertaking providing civil liability motor 
insurance in the Single Market) – European Economic Area  

The Agreement provides for the intervention of Compensation Bodies and compensation 
by Guarantee Funds in cases where the insurer of the liable party becomes insolvent. This 
is a system built on and in analogy to the one foreseen under Article 25 of the codified 
Motor  Insurance  Directive  (2009/103/EC).  The  victim  who  suffered  an  accident  in 
another country than their country of residence and caused by a vehicle insured with an 
MTPL insurer which becomes insolvent, can file a claim with the Compensation Body of 
their  country  of  residence.  This  Compensation  Body  compensates  victim  and  will  be 
reimbursed  by  the  Guarantee  Fund  of  the  state  where  the  vehicle  which  caused  the 
accident  is  normally  based.  However,  the  accident  must  have  occurred  in  the  same 
country as the one where the vehicle is normally based. 

According to the CoB, the shortcomings of the 2008 Agreement are that: 

 

 

 

it  cannot  be  applied  in  a  country  where  the  laws  of  which  do  not  provide  for  the 
intervention of the Guarantee Fund where an MTPL insurer is insolvent  

it is a voluntary agreement, based on reciprocity and not all countries of the European 
Economic Area are signatories to it; 

it  cannot  be  applied  in  cases  where  the  accident  occurred  in  an  EEA  country  other 
than where the vehicle is normally based. 

FREEDOM of SERVICE (FoS)/ FREEDOM of ESTABLISHMENT (FoE) AND INSOLVENCY 

B) The 2006 AGREEMENT (Agreement between Bureaux within the framework of 
compulsory motor insurance) – European Economic Area only 

The  aim  of  the  Agreement  is  that  if  an  insurance  company  operating  under  FoS  in  the 
compulsory motor insurance sector 

  does  not  comply  with  the  obligations  emanating  from  the  Internal  Regulations  or  a 

successor agreement, or 

 

 

 becomes insolvent and, as a result, the Bureau of the country where the services are 
rendered is obliged to make payments as debtor Bureau, 

the  latter  will  be  reimbursed  totally  by  the  Bureau  of  the  country  where  this 
compulsory motor insurance company is established. 

According to the CoB, the shortcomings of the 2006 Agreement are that: 

 

it is a voluntary agreement, based on reciprocity and not all Bureaux in the European 
Economic Area are signatories to it; 

147 

 
 
 
 
 

 

there were derogations announced by some signatories; 

it is only applicable to situations of FoS and not FoE. 

C) The 1995 AGREEMENT (Convention on recourse between Guarantee Funds in 
case  of  insolvency  of  a  motor  liability  insurer  operating  in  the  Single  Market)  – 
European Economic Area 

This  Agreement  was  concluded  with  a  view  to  allocate  the  financial  burden  of  the 
insolvency of an MTPL insurance undertaking operating also in various countries under 
Freedom to Provide Services or Freedom of Establishment. The idea is that the financial 
consequences  should  be  borne  by  the  market  where  the  financial  supervision  of  the 
undertaking takes place (home country control principle). Thus, the agreement provides 
for  a  compensation  mechanism  by  which  the  sums  paid  as  compensation  by  the 
Guarantee Fund of the host country have to be paid back by the Guarantee Fund of the 
home country of the insurance undertaking. 

According to the CoB, the shortcomings of the 1995 Agreement are that: 

 

 

 

the difference in national laws regarding protection mechanism for the insolvency of 
insurance companies offering MTPL policies render the application of the Agreement 
difficult (a number of reservations were made to it); 

it is a voluntary Agreement, and thus was not signed by all the Guarantee Funds of 
the European Economic Area; 

the Agreement was modified on two occasions and not every signatory is bound by 
the  modified  versions.  (The  modifications  introduced  amongst  others  a  reciprocity 
clause and a compensation cap). 

3. Overall assessment of the current system of voluntary agreements: 

According to the CoB the current system voluntary agreements of protection against the 
insolvency of MTPL insurers is not entirely satisfactory for the following reasons: 

  Not every EEA state has a protection regime against insolvency. 

  Even  if  there  is  protection  in  place,  its  nature  and  level  differs  from  country  to 

country, as well as the way of contribution to the fund. 

 

In  the  case of  insurance  undertakings  operating  under  FoS  and  FoE,  there  is  no 
uniformly  introduced  guiding  principle  in  the  EEA  to  determine  where  the 
responsibility for the insolvency of such undertakings lies and consequently, who 

148 

 
 
 
 
 
would  bear  the  financial  burden.  This  results  in  double  protection  in  some 
countries and no protection at all in others. 

  The solutions found by the CoB can only be partial and thus are not satisfactory. 

4. Overview of signatories of the voluntary agreements. 

149 

 
 
 
 
 
150 

 
 
 
ANNEX 11: SCOPE OF THE MOTOR INSURANCE DIRECTIVE: LACK OF UNIFORM 
APPLICATION OF THE MATERIAL AND TERRITORIAL SCOPE OF THE MOTOR INSURANCE 
DIRECTIVE ACROSS THE EU 

In  complement  to  the  evaluation  report,  this  Annex  explores  in  detail  the  scope  of 
application  of  the  Directive.  As  outlined  in  the  evaluation  report  (Annex  7),  there  are 
certain specific issues concerning the consistent application of the scope of the Directive 
which arose in connection with a number of CJEU rulings. Since these issues are closely 
linked with CJEU rulings, the codification of these court rulings in national legislation is 
considered  the  optimal  approach  to  ensure  legal  certainty  and  achieve  a  high  level  of 
protection of victims of motor accidents. As the codification does not change the scope of 
the  directive  but  rather  only  specifies  it  more  clearly,  this  legislative  action  is  not 
assessed in the main impact assessment. However, since there were Member States and 
stakeholders calling for a reassessment of the scope of the Directive as interpreted in the 
rulings,  this annex  explains the Commission's  reasons for preferring  codification of the 
rulings.    

1. Background and description of the problem 
Hitherto,  certain Member States have  interpreted the obligation  for MTPL insurance  as 
laid down in Article 3 of the Directive as not extending to all motorised vehicles used in 
all  locations  and  for  all  purposes.  In  particular,  certain  Member  States  do  not  impose 
domestically an obligation for MTPL insurance for certain uses of vehicles outside road 
traffic. The uncertainty about the exact scope of the MTPL requirement as laid down in 
the MID was compounded by the terminology used in different language versions of the 
Directive. Thus, the English text refered to "the use of vehicles" as falling in the scope of 
the Directive, whereas the French text referred to "circulation" instead of "use".111  
Currently,  there  is  thus  divergence  in  the  application  of  the  obligation  on  the  MPTL 
insurance  across  Member  States.  Some  Member  States  do  not  extend  the  MPTL 
insurance to vehicles operating on some types of properties (such as private properties or 
properties that are not accessible to the public) or to some categories of motor vehicles 
independently of where they operate (for example, because the obligation is triggered by 
the  registration  obligation,  which  does  not  apply  to  vehicles  operating  only  on  private 
property). 
The  CJEU  has  clarified  the  scope  of  the  Directive  on  three  successive  occasions,  as 
described in Box 10. In the Vnuk ruling the Court ruled that any use of the vehicle that is 
consistent  with  its  normal  function  should  be  covered.  In  Rodrigues  de  Andrade,  the 
Court ruled that "normal function of the vehicle" is to be understood to be linked with its 
"transport" function and not any other function that a vehicle could have (e.g. ploughing 
in case of a motorised plough). In Torreiro, the Court ruled that the characteristics of the 
terrain have no bearing to determine whether the vehicle is in "normal use" or not.    

111  Article  3  in  French:"  Chaque  État  membre  prend  toutes  les  mesures  appropriées,  sous  réserve  de 
l’application de l’article 5, pour que la responsabilité civile relative à la circulation des véhicules ayant 
leur stationnement habituel sur son territoire soit couverte par une assurance." 

151 

 
 
 
                                                            
This  means  that  victims  are  protected  in  case  of  motor  accidents,  regardless  of  the 
characteristics  of  the  property  or  terrain  on  which  the  accident  occurred.  However,  the 
use of the vehicle in case of a motor accident should be linked to its transport function 
and not to any other potential function it may have.  

Box 10: CJEU Court rulings on scope of the Directive 

There have been three main rulings which addressed the topic of the scope of application 
of the directive in the period 2014-2017. 

1. CJEU Vnuk Judgement  
In  2013,  the  CJEU  was  asked  by  a  Slovenian  Court  to  rule  on  whether  an  accident 
involving a tractor reversing in an enclosed area of a barn should be covered by MTPL 
insurance. In the "Vnuk v Triglav ruling"112 of 4 September 2014,  the Court clarified the 
scope  of  the  MTPL  insurance  obligation  in  article  3  of  the  Directive  as  being  any 
activities consistent with the "normal function" of a vehicle. The accident involving the 
tractor in question should have therefore been covered. It was implicit in the Vnuk ruling 
that  this  requirement  exists  regardless  of  the  place  where  the  vehicle  is  used  for  its 
normal  function.  However,  the  Court  failed  to  clarify  how  the  "normal  function"  of  a 
vehicle should be determined.  

2. CJEU Rodriges de Andrade Judgement 

The CJEU stance  on the  matter  has been  further clarified in the Rodrigues de Andrade 
judgment  on  28  November  2017113.  In  that  ruling,  the  Court  clarified  that  only  the 
"normal use of the vehicle as means of transport" and "irrespective of the terrain" should 
be  covered  by  MTPL  insurance,  excluding  accidents  where  the  vehicle  was  used  for 
exclusively agricultural use. This statement of the Court could further be interpreted as 
meaning  that  any  other  use  of    avehicle  e.g  for  purely  industrial,  construction, 
agricultural  or  fairground  activities  are  out  of  the  scope  of  the  MTPL  insurance 
obligation  in  article  3  of  the  Directive.  The  ruling  nevertheless  makes  it  clear  that 
accidents  caused  during  the  normal  use  of  a  vehicle  for  the  purpose  of  transportation, 
including its use on private properties, remain within the scope of the Directive 

3. CJEU Torreiro Judgement 

On  20  December  2017,  the  Torreiro  judgement114  further  specified  the  position  of  the 
Court. This ruling related to an accident that happened on a military ground that was used 
mainly  by  tracked  vehicles.  The  insurer argued that  the terrain  was  not  suitable  for the 

112 See Annex 7, Section 3.2 for more details of the Vnuk judgement of 14 September 2014 (C-162/2013). 

113 See Annex 7, Section 3.2 for more details of the Rodrigues de Andrade judgement C-514/16 

114 See Annex 7, Section 3.2 for more details of the Torreiro judgement (C-334/16) 

152 

 
 
 
 
 
 
                                                            
vehicle in question which is permissible under the current Spanish legislation. The CJEU 
rejected the possibility of the Spanish law to "exclude from compulsory insurance cover 
injuries  and  damage  that  result  from  the  driving  of  motor  vehicles  on  roads  or  terrain 
that are not ‘suitable for use by motor vehicles’, with the exception of roads or terrain 
which, although not suitable for that purpose, are nonetheless ‘ordinarily so used’." 

Following  the  Vnuk  judgement,  certain  Member  States  where  MTPL insurance  did  not 
extend to the use of motor vehicles outside public road traffic considered that the CJEU's 
broad  interpretation  of  the  scope,  covering  private  land  outside  of  traffic,  would  risk 
causing excessive cost due to increased MTPL premiums. Therefore, they requested the 
Commission to propose to limit the scope of article 3 of the MID to traffic only and to 
places that are publicly accessible. However, other Member States did not consider that 
there  is  any  need  for  action.  Those  Member  States  regard  their  application  of  the 
Directive  to  already  be  in  line  with  the  recent  rulings  and  contest  that  the  refined 
interpretation of scope has any strong detrimental impacts on insurance premiums.    

In  addition,  during  the  consultative  work,  (see  Annexes  2  and  3),  a  large  number  of 
stakeholders  representing  or  supporting  the  motor  racing  sector  called  for  a  complete 
exclusion of that sector from the scope of the Directive, arguing that the cost of MTPL 
insurance,  especially  as  regards  accidents  between  motor  sports  competitors,  would  be 
prohibitive  for  the  sector  and  put  its  very  existence  into  question.  A  restriction  of  the 
scope of the Directive to public traffic only, as advocated by some Member States, would 
also have the effect of excluding the motor racing sector, as public access to motor sports 
circuits must be prohibited for safety reasons.   
The  Vnuk  ruling  thus  triggered  discussions  as  regards  the  impact  on  territorial  and 
material scope of the Directive115. It was argued by some Member States that the ruling 
effectively clarified the scope of the Directive so that MTPL insurance cover for motor 
vehicles must extend to activities that are unrelated to traffic, such as purely industrial, 
construction,  agricultural  and  motor  sports  activities.  These  discussions  revealed  that 
Member States approach the scope of the insurance cover differently. As the Rodrigues 
de Andrade ruling clarified that purely operational activities that do not involve transport 
need not be covered by mandatory MTPL insurance, it can be interpreted that, in addition 
to agricultural activities, also industrial and construction activities do not fall within the 
scope  of  the  MTPL  insurance.  Yet  despite  the  CJEU  rulings  the  transposition  of  the 
scope of the Directive remains divergent across the EU, as some Member States have not 
adapted their national legislation in line with the rulings.  
In those Member States which do not extend the insurance obligation for motor vehicles 
to  private  property  without  public  access,  there  might  be  a  domestic  obligation  for 
another  liability  insurance  policy  to  be  taken.  However,  this  is  not  the  case  for  all 
Member States, and where it is the case, the amounts of cover may be inferior to those 
laid  down in the Directive. This  exposes citizens to  a risk of insufficient  compensation 
for accidents caused by certain motor vehicle activities in certain Member States. 

115 See Annex 1 for the meetings of the expert group of Member States on this issue. 

153 

 
 
  
 
                                                            
2. Assessment of the possible approaches regarding the scope of the Directive.  

2.1  Take no action 

If no action were taken the material and territorial scope of the Directive would remain 
unchanged as clarified in the CJEU's rulings on "Vnuk" and "Rodriges de Andrade" and 
Torreiro. This means that in line with the Vnuk ruling any activities consistent with the 
"normal  function"  of  a  vehicle  should  be  covered  by  third  party  liability  insurance. 
Furthermore,  in  line  with  the  Rodriges  de  Andrade  ruling,  only  the  "normal  use  of  the 
vehicle as means of transport" irrespective of the terrain should be covered by third party 
liability insurance. In effect, accidents on private property would remain within the scope 
of the Directive. On the other hand, accidents where the vehicle was not used as a means 
of transport (agricultural use, industrial use etc.) would not be covered by the Directive.  

Under  this  approach,  Member  States  that  are  not  in  compliance  with  the  Directive  as 
interpreted by the CJEU would be required to change national legislation to extend the 
range of vehicles and activities subject to a requirement for MTPL insurance. Based on 
feedback  received  from  Member  States,  a  certain  number  of  Member  States  would  be 
required  to  amend  national  legislation.  If  any  of  these  Member  States  would  fail  to 
comply with the Directive as interpreted by the Court, the Commission may be required 
to  initiate  infringements  proceedings  against  them.  In  Member  States  which  do  not 
require  MTPL  insurance  for  vehicles  solely  used  on  private  property,  there  might  be 
some  vehicles  that  were  previously  not  subject  to  compulsory  insurance,  but  which 
would be now required to obtain motor liability insurance cover. Alternatively, given the 
extension  of  the  scope  at  national  level,  this  could  be  also  reflected  in  higher  costs  for 
insurance premiums, as insurers cover additional risks.  

This option would risk that implementation would be rushed and disorderly, and without 
the  opportunity  for  the  Commission  to  oversee  implementation  based  on  systematic 
information  provided  by  member  States  in  a  transposition  process.  A  disorderly 
implementation could lead to unequal protection of victims of motor accidents and legal 
uncertainty which might delay the compensation of victims in accidents where Member 
States  laws  were  not  in  compliance  with  the  Court's  rulings.  Furthermore,  the 
implementation would be complex given the extensive case-law that has been built up at 
national level which makes it difficult to assess how Member States have implemented 
the Directive.  

2.2 Codify the CJEU rulings  

Given the inherent risks of disorderly implementation in the case of no action and as the 
described  issues  of  scope  arise  solely  as  a  result  of  CJEU  rulings,  the  Commission 
considers  it  preferable  to  codify  these  rulings  in  order  to  ensure  legal  clarity.  The 
codification  of  the  CJEU  rulings  involves  explicitly  inserting  the  key  provision  of  the 
consecutive  rulings  on  the  scope  of  the  directive,  (including  VNUK,  Rodriges  de 
Andrade  and  Torreiro)  in  the  Directive.  This  would  mean,  as  with  no  action,  that  the 
current  material  scope  of  the  Directive  remains  unchanged  as  clarified  in  the  CJEU's 
rulings on "Vnuk" and "Rodriges de Andrade" and Torreiro" and that the implementation 
of the rulings in national legislation would be verified by normal transposition checks. 

154 

 
 
 
This approach allows Member States to implement the changes implied by the rulings in 
an  orderly  and  transparent  fashion.  Furthermore,  it  would  provide  more  legal  certainty 
for  stakeholders  on  the  scope  of  the  MID  as  the  court  rulings  would  be  directly 
transposed  into  national  legislation.  Codification  also  facilitates  the  enforcement  of  EU 
law  in  this  domain,  as  it  would  be  accompanied  by  a  regular  transposition  exercise.  In 
addition, it would provide Member States with sufficient time to implement the Court's 
interpretation  of  the  scope  of  the  Directive.  Infringement  procedures  would  only  be 
initiated  after  the  transposition  exercise  has  been  finalised  and  only  against  those 
Member  States  that  failed  to  transpose  correctly.  The  consequences  are  otherwise  the 
same  as  under  the  'no  action'  approach.  Enforcing  the  CJEU  rulings  directly  without 
codification would however not guarantee the same degree of uniformity across Member 
States.  

2.3 Limit the scope to traffic, excluding property that is not accessible to the public  

Several of the Member States whose national legislation is currently not in line with the 
recent  CJEU  rulings  argue  that  the  Directive  should  be  amended  so  that  the  MTPL 
insurance  obligation  under  the  Directive  only  applies  to  accidents  caused  by  motor 
vehicles in the context of traffic116. Under this approach, compensation bodies provided 
in  Article  10  of  the  Directive  would  not  be  obliged,  under  EU  law,  to  compensate 
consequences of accidents caused by motor vehicles when the accident did not occur "in 
traffic".   

Changing  the  material  and  territorial  scope  of  application  of  the  Directive  in  this  way 
would  imply  that  accidents  involving  vehicles  used  outside  of  the  context  of  traffic  
would  not  be  covered  by  the  Directive.  Victims  would  thus  not  be  compensated  by 
MTPL insurance in accordance with the respective provisions, and may have to sue the 
responsible party directly for compensation. In many Member States third party liability 
arising from these types of events would be covered by other insurance policies required 
by law or commonly  used,  such as policies for public liability, employment liability or 
professional liability; however the level of obligatory amount of cover may well be lower 
than the minimum amounts laid down by the Directive. The level of protection of victims 
could  therefore  be  lower.  Fewer  victims  would  be  covered  by  compulsory  insurance 
policies  and  there  would  often  be  a  lower  level  of  compensation  depending  on  the 
contractual obligations of alternative insurance policies that cover these accidents.  

This lower level of protection of victims that the approach implies would go against one 
of the key objectives of the Directive, to ensure a high level of protection for victims of 
motor  vehicle  accidents.  Third  party  liability  coverage  would  not  be  compulsorily 
provided in areas that are not accessible to the public. This means that victims would not 
be  protected,  for  example,  on  private  driveways,  holiday  resorts,  secured  areas  of 
airports, roads on golf courses, any clubs' private terrains, or farms.  

116  Some  definition  of  traffic  would  be  required,  for  example  "the  use  of  a  motor  vehicle,  whether  in 
movement or not, for the transport of persons or goods, in a place to which the public has access in 
accordance with national law". 

155 

 
 
 
                                                            
It has been put forward that in certain Member States amending national law to comply 
with the wide scope in the CJEU judgements would lead to increases in premiums. There 
is  however  no  conclusive  evidence  on  the  actual  impact  on  premiums.  Certain 
stakeholders  claimed  that  the  cost  of  MTPL  policies  for  vehicles  used  in  areas  without 
public  access  would  be  expensive.  It  was  alleged  that  premiums  would  increase  in 
particular  as  there  would  be  a  significant  scope  for  fraud  in  the  case  of  accidents 
occurring  on  private  property.  The  written  submission  of  the  UK  estimates  the  cost  of 
extending  obligatory  MTPL  cover  for  motor  cars  to  private  land  as  UK£1.2  billion per 
year,  of  which  60%  is  estimated  as  being  due  to  increased  fraud.  The  UK  furthermore 
estimates that the total cost of extending obligatory MTPL cover for all kinds of motor 
vehicles  to  private  land  as  UK£1.8  billion,  of  which  28%  would  be  due  to  fraud,  and 
12.5% (UK£229 million) would be attributable to motor sports117. These calculations are 
however based on internal figures and models that the Commission was not able to verify 
in detail. Other Member States, such as France, have emphasised that they already apply 
the MTPL insurance requirement to private land without public access. While the current 
level of MTPL premiums in France should therefore already reflect the wide scope, the 
average  French  premiums  are  far  from  being  the  highest  in  the  EU118.  This  casts 
significant  doubt  as  to  the  detrimental  impact  on  premiums  projected  by  the  UK, 
especially as other Member States that also appear to be in conformity with the rulings do 
not exhibit extensively high premiums either.  

On the specific case of motor sports, there is equally insufficient evidence to support the 
claim that the codification of rulings would lead to prohibitively high pricing of policies 
and  threaten  the  very  existence  of  motor  sports.  Many  stakeholders  have  argued  that 
amateur  motor  sports  would  no  longer  be  viable  if  the  MTPL  insurance  requirement  is 
applied.  However,  countries  such  as  Finland  which  already require  MTPL  insurance  in 
line  with  the  Directive  nonetheless  have  a  flourishing  motor  sports  sector  both  at 
professional  and  amateur  level119.  This  strongly  suggests  that  the  claims  of  the  motor 
sports sector are not justified.  

Lastly, it should be noted that there are already possibilities at national level to exempt 
certain  activities  or  categories  of  vehicle  from  the  application  of  the  motor  insurance 
directive, by means of article 5. But in that case victims of accidents caused by exempted 
vehicles must be compensated from compensation bodies and the cost shared among all 
MTPL policyholders. 

3. Conclusion  

Both  the  option  of  'no  action'  and  codification  of  rulings  would  ensure  that  the  wide 
scope of the Directive as interpreted by the CJEU is maintained and enforced accordingly 
across  the  EU.  The  option  of  codification  however  provides  for  a  more  uniform 

117 See the reference to the UK submission in annex 2. The UK calculation is based on unlimited cover for 
personal injury rather than the minimum amounts laid down in the Directive. The basis for the fraud 
estimate is not clear. 

118 Insurance Europe report: European Motor Insurance Markets, November 2015 

119 The written contribution of the Finnish authorities to the Commission confirms this situation in Finland. 

156 

 
 
                                                            
transposition of the court rulings in national legislation. As such, it creates greater legal 
certainty  on  the  scope  of  application  of  the  Directive.  This  will  ultimately  benefit  both 
victims of motor insurance accidents as well as insurers. Victims will have more uniform 
protection  across  all  EU  Member  States,  resulting  in  timely  compensation  without  the 
need  for  litigation.  Insurers  will  equally  benefit  from  legal  certainty  and  a  lower 
likelihood  of  litigation.  Clarifying  the  scope  of  the  Directive  by  codification  will 
furthermore give Member States sufficient time to implement any necessary changes to 
national legislation in an orderly fashion. In turn, this will allow insurers to assess more 
accurately the new risk situation and, if necessary, adjust premiums.     

Restricting the scope of application to traffic, on the other hand, would unduly lower the 
level  of  protection  of  victims.  Accidents  on  private  property  are  a  common  occurrence 
and  any  victims  of  such  accidents  would  be  insufficiently protected.  This  would  create 
litigation  costs  for  victims  to  obtain  compensation  for  damages  and  injury  through 
damages  proceedings.  Insurers  would  also  face  an  increased  risk  of  litigation.  There  is 
insufficient  evidence  to  substantiate  claims  that  the  codification  of  rulings  would  have 
any  significant  detrimental  impact  on  premiums.  Even  for  the  specific  case  of  motor 
sports,  there  is  no  conclusive  evidence  to  suggest  that  these  activities  could  no  longer 
take place due to prohibitive pricing of policies. 

ANNEX 12: DETAILED DESCRIPTION OF KEY PERFORMANCE INDICATORS 

Indicator   Definition  Unit  of 

measure
ment 

Data 
Sourc
e 

of 

Frequen
cy 
measure
ment  

Biennial 

Baseline  Target  

Current 
annual 
average 

Reduce  / 
No 
specific 
target 
level  

N/A  
Amounts 
in EUR  

MS 
data 

Operatio
nal 
Objectiv
e  

Ensure  a 
high  level 
of 
protection 
for 
victims  of 
motor 
vehicle 
accidents 
in 
(even 
case 
of 
insolvenc
y  of 
insurer) 

the 

KPI 1  

KPI 2 

Number  of 
victims 
awaiting 
payment 
and  amount 
of 
outstanding 
claims  due 
to  delays  in 
payments 
following 
cross-
border 
insolvency 
cases 

of 

Level 
minimum 
amounts  of 
in 
cover 
Member 
States 

EUR  

Biennial 

N/A  

MS 
data 

Level  of 
cover 
stipulated 
the 
respectiv
e 
provision  

157 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
KPI 3  

KPI 4 

Amount  of 
claims  due 
to 
uninsured 
driving 
cross-
border 
traffic. 

of 

Number  of 
complaints 
regarding 
claims 
history 
statements 

Ensure 
equal 
treatment 
of 
policyhol
ders 
across 
the  EU. 
(in 
particular 
when 
changing 
Member 
State  of 
residence
). 

N/A 

Biennial 

Current 
annual 
average 

Reduce  / 
No 
specific 
target 
level 

Reduce  / 
No 
specific 
target 
level  

Biennial 

Current 
annual 
average 

MS 
data 

MS 
data 

N/A  

158