COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE 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 of 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

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   EUROPEAN COMMISSION  Brussels, 24.5.2018  SWD(2018) 248 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE 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 of 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) 247 final}  
 
 
Impact assessment on Commission proposal for an amendment to the Motor Insurance Directive 

Executive Summary Sheet 

A. Need for action 

Why? What is the problem being addressed?  
Following  an evaluation  of  the  Motor  Insurance  Directive,  first  adopted  in  1972  and  amended  several  times,  it 
was concluded that although the Directive in general functions well, two aspects were negatively influencing its 
effectiveness: 
1. 

Insufficient protection of victims of motor vehicle accidents. Two factors contribute to this: 

o  Firstly,  when  a  motor  insurer  becomes  insolvent  before  paying  claims  arising  from  its 
policyholders, there are no EU-level rules to ensure swift payment of victims, especially where 
the insurer is providing insurance cross-border using the freedom to provide services. In recent 
cases of such insolvencies, significant delays in payment of compensation to victims occurred. 
o  Minimum obligatory amounts of cover for motor insurance, laid down in the Directive since 2005, 
are not  the same  in all  Member  States,  due  to  different  reference  periods  for  various  Member 
States which are no longer appropriate. 

2.  Differential treatment and freeriding behaviour negatively affecting policyholders. In this case there are two 

factors: 

o  When  a  policyholder  moves  residence  to  another  EU  Member  State,  their  claims  history 
(resulting  in  a  "no-claims  bonus"  or  "bonus-malus"  rating)  is  not  always  taken  into  account  by 
motor insurers in the new Member State of residence. 

o  A  high  level  of  uninsured  driving  results  in  higher  insurance  premiums  for  policyholders  than 
would  otherwise  be  the  case  (guarantee  funds  ensure  payment  of  victims  in  such  cases,  but 
they are funded by a levy on motor insurance policies, affecting policyholders). 
In  addition,  a  number  of  recent  judgements  of  the  European  Court  of  Justice  have  provided  important 
clarifications  which  confirm  the  scope  of  application  of  the  Directive  (which  vehicles  and  which  situations  are 
subject to an obligation of motor insurance cover). For this topic the proposed policy choice was a codification of 
existing case-law and therefore falls outside the scope of this impact assessment.  

What is this initiative expected to achieve?  
The  initiative  is  expected  to  achieve  a  high  level  of  protection  of  victims  of  motor  vehicle  accidents  and  fair 
treatment of motor insurance policyholders, especially those who are mobile across Member States. 

What is the value added of action at the EU level?  
The  Directive  protects  victims  of  road  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 cross-border insurance checks of vehicles. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
As the Directive already exists, the baseline option in all cases was no change to the Directive. Furthermore, the  
baseline scenario was further clarified by a number of CJEU court rulings on the scope which are codified in the 
Directive.  
Regarding insolvency of insurers, a subject not currently part of the Directive, a rejected option was to impose a 
responsibility  for  initial  compensation  of  victims  but  no  ultimate  responsibility.  The  selected  option  was  to 
designate  both  responsibilities,  with  initial  responsibility  on  the  Member  State  of  residence  of  the  victim,  and 
ultimate responsibility on the Member State of establishment of the insolvent insurer. 
Regarding  minimum  amounts  of  cover,  a  rejected  option  was  to  impose  higher  obligatory  amounts  for  larger 
vehicles  such  as  trucks  and  buses.  The  preferred  option  is  to  harmonise  amounts  to  the  highest  obligatory 
minimum level currently applying in Member States. 
Regarding claims history, a rejected option was to only harmonise the template for claims history statements but 
without imposing any obligatory treatment of such statements by insurers. The selected option is to harmonise 
the claims history statement and at the same time to impose the same treatment for such statements, regardless 
of the Member State of origin of the policyholder. 
Regarding  uninsured  driving,  a  rejected  option  was  to  make  unobtrusive  insurance  checks  obligatory.  The 
selected option was to authorise such checks (currently prohibited) on a voluntary basis for Member States. 

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Who supports which option?  
There  is  wide  support  from  all  categories  of  stakeholders  for  an  EU  initiative  to  ensure  rapid  payment  of 
compensation  to  victims  of  accidents  in  case  of  insolvency  of  a  motor  insurer,  especially  in  a  cross-border 
context. A majority of stakeholders support the option placing ultimate financial responsibility in such cases with 
the home Member State of establishment of the motor insurer in question. 
There is support ( among stakeholders to harmonisation of minimum amounts of cover for motor insurance to the 
higher level which already applies  in many Member States. Some consumer  organisations supported a higher 
level of obligatory cover for larger vehicles such as trucks and coaches, but this was opposed by the insurance 
sector  and  trucking  and  coaching  companies  as  not  justified  by  evidence  and  causing  higher  insurance  costs 
which would be passed on to end consumers.  
Regarding cross-border transferability of claims history documents, a number of individual citizens related their 
negative experiences in this respect and called for intervention to ensure that cross-border mobile citizens are 
treated  the  same  as  existing  residents  of  a  Member  State,  as  regards  their  claims  history  statements.  The 
insurance  sector  did  not  support  binding  obligations  on  insurers  in  this  regard,  as  being  disproportionate. 
Nevertheless, some consumer organisations supported harmonisation of claims  history statements and a non-
discrimination clause protecting citizens moving residence to another Member State. 
Regarding uninsured driving, there was no opposition to authorising unobtrusive insurance checks. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
1.  Rapid and adequate payment of compensation to victims, even where the motor insurer becomes insolvent, 
is the main benefit of the selected options. 
2.  Better treatment of policyholders in terms of their claims history, and possibly lower premiums, if uninsured 
driving is reduced. 

What are the costs of the preferred option (if any, otherwise main ones)?  

The  costs  of  the  preferred  options  will  accrue  to  motor  insurers.  They  will  need  to  contribute  to  bodies  which 
compensate  victims  in  cases  of  the  insurer's  insolvency.  This  is  already  the  case  for  most  insurers  in  most 
Member States, but not always for insurers providing insurance cross-border. They will also need to put in place 
procedures  to  ensure  equal  treatment  of  claims  history  statements  originating  in  another  Member  State  with 
claims history statements originating in their own member State. 

How will businesses, SMEs and micro-enterprises be affected?  

The proposal does not entail any specific impact for small and medium-sized enterprises except those which are 
insurers  or  policy  holders  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). 

Will there be significant impacts on national budgets and administrations?  
There  will  be  no  impact  on  national  budgets,  unless  a  Member  State  takes  up  the  option  for  unobtrusive 
insurance checks of vehicles normally based in another Member State, which would require the use of number 
plate  recognition  technology  and  exchange  of  information  with  other  Member  States  on  insurance  status  of 
vehicles.  Member  States  will  have  to  designate  a  body  responsible  for  compensation  of  victims  in  cases  of 
cross-border insolvency of insurers, but it is anticipated that this will be an additional task for an existing body 
(either a general insurance guarantee fund, or the guarantee fund already required by the Directive for cases of 
accidents  caused  by  uninsured  or  untraceable  vehicles).  Costs  will  be  funded  by  contributions  from  motor 
insurers. 

Will there be other significant impacts?  
There are no other significant impacts expected except than the improved protection of citizens in case of motor 
accidents  providing  a  higher  confidence  in  cross-borders  provision  of  motor  insurance  as  part  of  the  internal 
market. Furthermore, an easier acceptance and authentication of claims history statements will benefit citizens 
moving residence within the EU.  

When will the policy be reviewed?  
The legislation provides for an evaluation of the new provisions after 5 years of application. 

D. Follow up 

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