Plan to create register of EU motor insurers

Date: 24/10/1996

By Simon Coss

MOTORISTS involved in traffic accidents outside their home country look set to benefit from proposals being prepared by Internal Market Commissioner, Mario Monti.

Under the present EU-wide 'green card' insurance system, if a Belgian driver is held responsible for an accident in Germany, a German victim will be compensated. But if a German is to blame for the incident, a Belgian victim will often have to go through a complicated and lengthy negotiation to gain redress.

The European Commission aims to tackle this problem by tabling a directive towards the end of the year. This would oblige all insurance companies registered within the EU to have a representative in every member state.

The Paris-based European Insurance Committee (CEA), which represents the industry, fully supports the idea.

“We are in favour of any practical, realistic measures to deal with this anomaly. This is just such a proposal,” said a top CEA official.

Under the scheme, British motorists involved in an accident in Greece, for example, would simply make a note of the other driver's insurance company and give the details to their own insurers in the UK. The British company would then check a central register of EU insurers and make contact with the appropriate Greek representative in the UK.

“This should mean claims are dealt with much more speedily and efficiently. It would avoid all sorts of linguistic problems, unnecessary correspondence and hitches caused by differences in judicial systems,” explained the CEA source.

The idea for the new directive was first floated in September 1995 by German socialist MEP Willi Rothley.

In a report to the European Parliament's committee on legal affairs and citizens' rights, Rothley called for all insurance companies to appoint representatives in each EU member state. Where necessary, this would allow the victims of road accidents to make a direct claim on the insurance company of the driver held responsible for the incident anywhere in the Union.

After the Parliament called on Monti to prepare a proposal for a Union directive on the issue, it was included in the Commission's Green Paper on financial services. Published in May, this aims to examine ways of harmonising banking, insurance, securities and stock exchange legislation across the EU.

“Financial services should focus on the needs of citizens. Commissioner Monti wants to act as soon as possible to meet citizens' needs on this issue,” explained a Commission official.

The consultation stage of the financial services Green Paper has now been completed and the Commission is expected to present its initial proposals on motor insurance by the end of the year.