CELEX: 51988PC0644
Language: en
Date: 1988-12-20
Title: Proposal for a THIRD COUNCIL DIRECTIVE on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 644
Vol. 1988/0213
 ---pagebreak--- Disclaimer
Conformément au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 concernant
l'ouverture au public des archives historiques de la Communauté économique européenne et de
la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, p. 1) modifié en dernier
lieu par le règlement (UE) 2015/496 du Conseil du 17 mars 2015 (JO L79 du 25. 3.2015, p. 1), ce
dossier est ouvert au public. Le cas échéant, les documents classifiés présents dans ce dossier
ont été déclassifiés conformément à l'article 5 dudit règlement ou sont considérés déclassifiés
conformément aux articles 26(3) et 59(2) de la décision (UE, Euratom) 2015/444 de la
Commission du 13 mars 2015 concernant les règles de sécurité aux fins de la protection des
informations classifiées de l'Union européenne.
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 concerning
the opening to the public of the historical archives of the European Economic Community and the
European Atomic Energy Community (OJ L 43, 15.2.1983, p. 1), as last amended by Council
Regulation (EU) 2015/496 of 17 March 2015 (OJ L 79, 27.3.2015, p. 1), this file is open to the
public. Where necessary, classified documents in this file have been declassified in conformity
with Article 5 of the aforementioned regulation or are considered declassified in conformity with
Articles (26.3) and 59(2) of the Commission Decision (EU, Euratom) 2015/444 of 13 March 2015
on the security rules for protecting EU classified information.
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom 1. Februar
1983 über die Freigabe der historischen Archive der Europäischen Wirtschaftsgemeinschaft und
der Europäischen Atomgemeinschaft (ABI. L 43 vom 15.2.1983, S. 1), zuletzt geändert durch die
Verordnung (EU) Nr. 2015/496 vom 17. März 2015 (ABI. L 79 vom 25.3.2015, S. 1), ist dieser Akt
der Öffentlichkeit zugänglich. Soweit erforderlich, wurden die Verschlusssachen in diesem Akt in
Übereinstimmung mit Artikel 5 der genannten Verordnung freigegeben; beziehungsweise werden
sie auf Grundlage von Artikel 26(3) und 59(2) der Entscheidung der Kommission (EU, Euratom)
2015/444 vom      13. März 2015 über die Sicherheitsvorschriften für den Schutz von EU-
Verschlusssachen als herabgestuft angesehen.
 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                        COM(88 ) 644 final - SYN 165
                                        Brussels , 20 December 1988
                             Proposai for a
                        THIRD COUNCIL DIRECTIVE
   on the approximation of the laws of the Member States relating
    to insurance against civil liability in respect of the use of
                             motor vehicles
                    ( presented by the Commission )
 ---pagebreak---                                 SUMMARY
 This proposal seeks to resolve certain problems left over from the
first two third party motor insurance directives of 1972 and 1983 .
These enabted green card insurance checks to be abolished and began the
process of reducing the disparities between the levels and content of
compulsory third party motor insurance in the Member States .
The proposal states in its Article 1 that all passengers ,    other than
the driver and passengers who have knowingly and willingly entered a
stolen vehicle, must be afforded the protection of the third party in¬
surance cover .
Article 2 removes doubts as to the obligation on Member States to
ensure that third party motor insurance policies provide at least the
minimum cover required by law in ail the Member States .
Article 3 stipulates that the guarantee fund , set up inter alia to com¬
pensate the victims of uninsured drivers , must not require such victims
first to establish that the uninsured party responsible is unable or
unwilling to pay compensation .
Lastly, Article A of the proposal lays down that , in the event of a
dispute between a liability insurer and the guarantee fund as to which
of them should compensate an accident victim, Member States must obli ¬
ge one or the other to compensate the victim without delay .
 ---pagebreak---                                        - 2 -
In general , in conformity with Article 100A ( 3 ), the present proposal aims
at guaranteeing a high level of protection for consumers in the field of
motor insurance .
Finally , the Commission 's services have considered the possible implications
of Article 9c of the Single Act for the issues covered by the present
proposal on motor insurance .   Although the draft Directive aims at ironing
out a number of administrative difficulties between Member States , no
problems created by differences in economic development between Member
States exist in this case .
                                                                     2
 ---pagebreak---                                EXPLANATORY MEMORANDUM
I.     Introduction
       This proposai seeks to résolve certain problems left over from the
       £ - _ i    . ( 1 I    .     .   •                      r ^
       first two third party motor insurance directives of 1972 and 1983 .
       It is one of the proposals listed in the Annex to the Commission 's
      White Paper on completing the internal market .        It also fulfils an
      undertaking given by the Commission to the Council when the second
      motor insurance directive was adopted at the end of 1983 to present
      a new proposal in this field within four years .
      The objectives of this new proposal are thus fully in line with
      those pursued in the two earlier directives , namely to facilitate
      the free movement of vehicles , goods and persons and to safeguard
      the interests of motor accident victims throughout the Community
      and irrespective of where in the Community the accident occurs .
      Accordingly , this new proposal contributes to the creation of the
      necessary conditions for the functioning of the internal market and
      is therefore based on Article 100 a of the EEC Treaty .
      In particular , this Directive aims , in conformity with Article 100 A ( 3 )
      of the Treaty , at ensuring a high level of protection for consumers in the
      field of motor insurance .
II . Background to and comments on the individual articles
      Article 1
      The first motor insurance directive had as its main objective the
      abolition of green card insurance checks in order to facilitate the
      free movement of goods and persons .
   ^ Council Directive 72/166/EEC 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 ( OJ
     No L 103 , 2.5.1972 , p. 1 ).
     Second    Council    Directive  84 / 5 / EEC of 30 December  1983  on  the
     approximation of the laws of the Member States relating to insurance
     against civil liability in respect of the use of motor vehicles ( 0J
     No L 8, 11.1.1984, p. 17 ).
 ---pagebreak---                             -2-
As a precondition for the removal of such checks the Directive laid
down in its Article 3(1 ) that each Member State was to ensure that
" civil liability in respect of the use of vehicles normally based
in its territory " was covered by insurance . The same provision ad¬
ded that " The extent of the liability covered and the terms and
conditions of the cover shall be determined on the basis of these
measures ".    The first Directive thus left Member States largely
free to decide the extent and coverage of compulsory third party
motor insurance .
The second motor insurance Directive ,     in contrast ,   set out to
achieve a certain harmonization in this area , or at least to reduce
the disparities in the treatment of accident victims .    To that end
it made the coverage of property damage compulsory ( in addition of
course to personal injury cover ), set minimum levels of compulsory
cover , stipulated that certain exclusion clauses may not be invoked
by the insurer against third party victims and laid down ( Article
3 ) that the members of the family of the insured , driver or other
person liable in the event of an accident should not be excluded
from the coverage of the liability insurance in respect of their
personal injuries simply by virtue of that family relationship .
The main aim of this latter provision was to protect these family
members who , particularly as passengers , constitute a very vulnera¬
ble category of potential victims .
However , the Commission services are aware of gaps that still exist
in passenger coverage in various Member States .     Greece still has
no compulsory passenger coverage at all ( but is planning to intro¬
duce it ), Ireland and Luxembourg do not at present require insur¬
ance cover for liability towards motor cycle pillion passengers ,
 ---pagebreak---                            -3-
while several Member States exclude the policyholder or owner of
the vehicle even when not driving the vehicle but carried as a pas-
senger .
These gaps can affect Community citizens visiting another Member
State in two ways .    As passengers in a locally registered vehicle
they have no say and often no knowledge of the insurance cover held
for the use of that vehicle and may face unpleasant surprises in
the event of an accident . Secondly , as passengers in a vehicle re¬
gistered in another Member State, Community citizens will in many
cases , indeed will normally, be subject to the compulsory motor in¬
surance cover of the country visited .    The basic principle of the
green card system is that a visiting vehicle is deemed to have the
basic cover required by law in the country visited and nothing
more .   Where the home country cover is particularly good , some in¬
surers do in fact extend that cover so as to apply in other coun¬
tries ( where statutory cover is less ) but they are not obliged to
do so .
The present situation is unsatisfactory .    Community citizens tra¬
velling in the Member States should be assured comparable protec ¬
tion throughout the Community when carried as passengers .    Article
1 therefore requires that all passengers , other than the driver or
passengers who have knowingly and willingly entered a stolen vehi ¬
cle , should be covered by the compulsory liability insurance .
Article 2
As a second precondition for the removal of green card checks the
first motor insurance directive laid down in its Article 3(2 ) that :
" Each Member State shall take all appropriate measures to ensure
that the contract of insurance also covers :
- according to the law in force in other Member States , any loss or
   injury which is caused in the territory of those States
 ---pagebreak---                            -4-
 Three Member States ( Italy , the Netherlands and the United Kingdom )
 have interpreted this provision as permitting third party motor in¬
 surance contracts to be issued the geographical scope of which is
 limited to the country of issue provided that arrangements are al ¬
ways made to ensure that the victims of accidents caused abroad by
the vehicles with such cover are properly compensated .        The basic
aim here is presumably to keep the corresponding premium levels
down .    In the Netherlands and the United Kingdom such contracts
appear to be restricted to commercial vehicles which will probably
never leave their country of registration .       In Italy the practice
would seem to be much more widespread .
Whenever such cover is issued the policyholder is obliged to notify
his insurer , and pay an additional premium, should he subsequently
wish nevertheless   to take    his  vehicle to   another  Member  State .
Should he in fact travel abroad without giving proper notice to the
insurer and there cause an accident the insurer will meet the claim
and compensate the third party and then have a right of recourse
against the policyholder .    The objective of the protection of acci ¬
dent victims in other Member States is indeed fulfilled .
The situation is unsatisfactory , however .    The policyholder may not
properly understand the consequences of his restricted cover and
may be unpleasantly surprised if taken to court by his insurer .
The insurer , for his part , may find in many cases that his right of
recourse against the policyholder is illusory, particularly if lar¬
ge amounts are at stake .      Such cover should therefore be discon¬
tinued , every policy of third party motor insurance providing cover
throughout the Community on the basis of a single premium . The
consequences in terms of premium increases should not be great .
In a fourth Member State , Greece , the situation is somewhat dif¬
ferent .   The compulsory Greek levels of cover ( which are still ra¬
ther low ) extend to the use of the vehicle throughout the Commu¬
nity .   In order to bring the level of this cover up to that requi ¬
red in the other Member States the Greek motorist planning to tra¬
vel abroad must pay an additional premium to obtain a green card ;
this is then checked as the vehicle leaves Greek territory .
 ---pagebreak---                            -5-
This   too   is  an  unsatisfactory  arrangement   which   should  be
discontinued .
Article 3
The second motor insurance directive requires Member States to have
a guarantee fund to compensate the victims of uninsured or hit -
and-run vehicles .   The Commission had originally proposed that the
guarantee fund would simply replace the absent liability insurer ,
compensating the victim as soon as liability was established . How¬
ever , the majority of the Member States insisted that the guarantee
fund should be " subsidiary " and should compensate the victim only
if no other source of compensation was available .   The disagreement
over the role of the guaranteee fund led to an entry in the Council
minutes when the second directive was adopted at the end of 1983 in
which the Commission undertook to examine the susidiarity problems
in greater detail and to present a new proposal within four years ,
i.e. by the end of 1987 .
The Commision had a study made of these problems by an outside ex ¬
pert and in July 1987 convened a meeting of Member States' experts
to examine the points raised .
The study and subsequent discussions with the Member States' ex ¬
perts brought to light only one major problem resulting from the
subsidiary intervention of the guarantee fund .        The problem in
question concerns the fact that in certain Member States the vic ¬
tim of an accident caused by an uninsured driver has to show he or
she is unable to obtain compensation from the uninsured driver be¬
fore he or she can claim on the guarantee fund .     The victims will
then have to correspond with or even take legal action against the
party responsible .   When the victim is resident in a Member State
other than that in which the accident occurred the inconvenience
will be particularly great .
                                                                      Ύ
 ---pagebreak---                           -6-
The Commission believes that in such cases the guarantee fund
should pay compensation to the victim as soon as the liability of
the uninsured driver is established .     The fund should then be su ¬
brogated in the rights of the victim and attempt to recover its
disbursement from the party responsible      if  it considers such a
course of action to be worthwhile . In any event the guarantee fund
is better placed that the victim, particularly a visiting victim ,
to defend its interests .
Article 4
The study referred to in the section dealing with Article 3 also
revealed another problem , not though one of subsidiarity , that can
arise involving the guarantee fund .
Article 2 of the second motor insurance directive . lays down that
three types of exclusion clause may not be invoked by the insurer
in respect of claims by third party victims .
However , there are other circumstances Ce.g . non payment of the
premium ) which can result in the use of a vehicle no longer being
covered by insurance .
It can happen that the insurer considers himself no longer bound by
the insurance contract    ( in which case the matter becomes one for
the attention of the guarantee fund ) while the fund considers that
the insurer was still on risk at the moment of the accident .       It
is assumed here that the liability    question has been resolved , the
only doubt being whether it should be the insurer or the guarantee
fund that compensates the victim .
To protect the interests of the victim either the insurer or the
fund should be designated as the payer of first instance pending
the ultimate resolution of the dispute .
 ---pagebreak---                          -7-
Articles 5 and 6
These articles need no comment .
 ---pagebreak---                                    Proposai for a
                           THIRD COUNCIL DIRECTIVE
  on the approximation of the laws of the Member States relating to in-
 surance against civil liability in respect of the use of motor vehicles
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Commu¬
nity, and in particular Article 100a thereof ,
Having regard to the proposal from the Commission^,
                                                  2
In coopération vnth the European Parliament ,
Having regard to the opinion of the Economic and Social Committee^,
                                 4     .                              _5
Whereas , by Directive 72/166/EEC , as last amended by Directive 84/5/EEC , the Council
adopted provisions on the approximation of the laws of the Member States rela
ting to insurance against civil liability in respect of the use of mo¬
tor vehicles and to the enforcement of the obligation to insure
against such liability ;
Whereas Article 3 of Directive 72 / 166 / EEC required each Member State 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 ; whereas the extent of the liability covered and the terms
and conditions of the insurance cover were to be determined on the ba¬
sis of those measures ;
   OJ No
   OJ No
   OJ No
   OJ No L 103, 2.5.1972 , p. 2
  OJ No L 8, 11.1.1984 , p. 17
                                                                                        /t®
 ---pagebreak---                                       -2-
Whereas Directive 84 / 5 / EEC reduced considerably the disparities between
the level and content of compulsory civil liability insurance in the
Member States ;
Whereas ,      however ,   significant disparities still exist in the coverage
of such insurance ;
Whereas the elimination of such disparities , by ensuring that motor ve¬
hicle accident victims receive comparable treatment irrespective of
where in the Community an accident occurs , ; will further facilitate the
establishment and the operation of the internal market ;
Whereas ,      in particular , there are gaps in the compulsory insurance co¬
verage of vehicle passengers in certain Member States ; whereas , to
protect this particularly vulnerable category of potential victims ,
such gaps should be filled ;
Whereas it         is    necessary   to remove    uncertainty concerning the
application       of    the first     indent of   Article 3(2 ) of Directive
72 / 166 / EEC ; whereas all compulsory motor insurance policies must cover
the entire territory of the Community and provide under a single
premium at least the cover required by law in all the Member States ;
Whereas Article 1(4 ) of Directive 84 / 5 / EEC requires each Member State
to set up or authorize a body to compensate the victims of accidents
caused by uninsured or unidentified vehicles ; whereas, however, the
said provision is without prejudice to the right of the Member States
to regard compensation by the body as subsidiary or non-subsidiary ;
Whereas , however , in the case of an accident caused by an uninsured ve¬
hicle the victim is required in certain Member States to establish that
the party responsible is unable or unwilling to pay compensation before
he can claim on the body ; whereas the body is better placed than the
victim to take action against the party responsible ; whereas , there¬
fore, the body should not be able to invoke its subsidiarity in this
case but should compensate the victim in the first instance ;
                                                                               /р\
 ---pagebreak---                                -з-
Whereas , in the event of a dispute between the body referred to above
and a civil liability insurer as to which of them should compensate the
victim of an accident . Member States , to avoid delay in the payment of
compensation to the victim , should designate either the body or the
insurer as responsible for paying compensation in the first instance
pending resolution of the dispute .
HAS ADOPTED THIS DIRECTIVE :
 ---pagebreak---                                      -4-
                                      Article 1
 Without prejudice to the second subparagraph of Article 2(1 ) of Direc¬
 tive 84/ 5 / EE<5, the insurance referred to in Article 3(1 ) of Directive
 72 / 166/ EEC and in Article 1(1 ) of Directive 84 / 5 / EEC shall cover liabi ¬
 lity for personal injuries to all passengers,          other than the driver,
 arising out of the use of a vehicle .
 For the purposes of this Directive the meaning of the term "vehicle " is
 as defined in Article 1 of Directive 72 / 166 / EEC .
                                      Article 2
 Member States shall take the necessary steps to ensure that all poli ¬
 cies of compulsory insurance covering civil liability in respect of the
use of vehicles :
               cover ,   on the basis of a single premium,     the entire terri -
               tory of the Community ;     and
               provide ,   on the basis of the same single premium,     in addi ¬
               tion to the cover required by law in the Member State in
               which the vehicle is normally based, at least the cover re¬
               quired by law in each of the other Member States .
                                     Article 3
The following sentence shall be added to the first subparagraph of Ar¬
ticle 1(4 ) of Council Directive 84 / 5 / EEC :
" However , Member States may not allow the body to make
 the payment of compensation conditional on the victim 's
establishing in any way that the person responsible is unable or unwil¬
 ling to pay ".
 ---pagebreak---                                -5-
                                   Article 4
For the case where there is a dispute between the body referred to in Article 1(4)
of Directive 84/5 /EEC and the civil liability insurer as to which must
compensate the victim, Member States shall designate one of these par¬
ties as responsible for compensating the victim without delay in the
first instance .     If it is ultimately decided that the other party
should have paid all or part of the compensation it shall reimburse
accordingly the party which has paid .
                                   Article 5
Member States shall    adopt the provisions necessary to comply with this
Directive not   later than 31 December 1992 .       They shall forthwith inform the
Commission thereof .
                                   Artide 6
This Directive is addressed to the Member States .
Done at Brussels ,                                   For the Council
 ---pagebreak---                               FINANCIAL STATEMENT
Adoption of the proposai for a Directive will not entail any costs to
the Community budget .
 ---pagebreak---     Impact on small and medium-sized undertakings and on employment
The proposed Directive should not hâve any conséquences spécifie to SME
and is unlikely to hâve any effect on employment .
This proposai is intended to improve the insurance protection of the
victims of road accidents and as such will unavoidably hâve consé¬
quences as regards the level of motor insurance premiums in certain
Member States .   This result ,   on a much larger scale , was accepted by
the Member States when the second motor insurance Directive ( 84 / 5 / EEC )
was adopted .   This new proposal would have the most pronounced effects
in Ireland and in Greece .      Just as special transitional periods were
requested and allowed for the application of the second Directive it is
quite possible that similar arrangements could be envisaged for this
proposal for a third directive .