Scope:

Evaluation of Motor Insurance Directive 2009/103/EC

Evaluation findings:

The evaluation showed that most of the elements of the Directive remain fit for purpose. However, it revealed that the functioning of the Directive was hindered by some problems such as: (i) the insufficient/unequal protection of injured parties in certain circumstances (insolvency of insurers, inconsistent minimum amounts of cover), and (ii) the 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 relating to the lack of uniform application of the scope of the MID across the EU in particular in light of ECJ judgements was identified.

Estimated savings and benefits

The evaluation found that the existing Directive brought a number of benefits to citizens, including a facilitated procedure for compensation of "visiting victims" (victims of traffic accidents in a Member State other than their Member State of residence), free circulation of motor vehicles within the EU, a minimum amount of insurance cover in case of accidents.

Which objective(s) did the Commission pursue?

The proposal aimed to ensure that victims of motor vehicle accidents receive the full compensation they are due, even when the insurer is insolvent. The revamped rules would also ensure that those who have a previous claims history in another EU Member State are treated equally to domestic policyholders, and potentially benefit from better insurance conditions.

The proposal also aimed to make it easier for authorities to combat uninsured driving. It aligned the minimum levels of cover by motor insurance across the EU. Finally, it clarified the scope of the Motor Insurance Directive following recent rulings of the Court of Justice of the European Union. The main benefits of the proposal would be a) rapid and adequate payment of compensation to victims, even where the motor insurer becomes insolvent, b) better treatment of policyholders in terms of their claims history, and possibly lower premiums, if uninsured driving is reduced.

Estimated savings and benefits

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 proposal does not entail any new reporting requirements to public authorities.

Outcome of legislative procedure

1. Scope (i.e. which vehicles are subject to insurance obligation and under what circumstances is insurance cover due): To enhance legal certainty, the Commission proposed to codify case-law of the Court of Justice. In particular, the rulings clarify that accidents caused during the normal use of a vehicle for the purpose of transportation, including its use on private properties, are covered by an existing insurance policy.
The final text incorporates the codification proposed by the Commission, but also brings some targeted reductions and derogations from the scope. In particular it carves out light electric vehicles below certain speed/weight limits. Member States will be able to exclude also vehicles not admitted to be used on public roads. Exclusions will apply also when vehicles are used for motor sports events or in restricted areas or temporary or permanently withdrawn from use.

2. Insolvency of an insurer: The Commission proposed introducing a new mechanism, warranting that if the insurer of the vehicle responsible for an accident is insolvent, victims will be rapidly and fully compensated in their Member State of residence. In cross-border situations, this will ensure that the ultimate financial responsibility is borne by the insurance sector of the home Member State of the insurer, while allowing for rapid compensation to victims.
The final text incorporates the proposal and further clarifies the procedural aspects, but also limits one of the triggers for compensation.

3. Uninsured driving: The Commission proposed to reinforce Member States' powers to combat uninsured driving by allowing Member States to conduct unobtrusive insurance checks under certain conditions. This should help tackle uninsured driving, which increases premiums for honest motorists, because they indirectly contribute to guarantee funds. The proposal called for voluntary exchange of information between Member States based on strong safeguards to ensure data protection.
The final text incorporates the proposal together with some additional data protection safeguards when data is exchanged.

4. Claims history statements: The Commission proposed that insurers will have to treat statements of claims history issued by an insurer in a different Member State in the same way as those issued domestically. This should ensure that citizens purchasing insurance in a new Member State of residence can benefit from more advantageous insurance premiums, on the same level as domestic consumers. The format of such statements is harmonised.
The final text incorporates the proposal with the clarification that the harmonised claims history statement relates to both: cross border situations and domestic situations.

A number of additional amendments by the co-legislators unrelated to the Commission proposal are also reflected in the final text.

Estimated savings and benefits

The estimated savings and benefits do not differ from the ones set out in the Commission’s proposal as the co-legislators have adopted the main elements introduced by the Commission.

The Commission works in close co-operation with the Member States on the transposition of Directive (EU) 2021/2118. To that end, it held two transposition workshops and follows up regularly with them on the progress made.