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Brussels, 21st March 2002

Motor insurance: Commission decides to refer France and Luxembourg to Court of Justice

The European Commission has decided to refer France and Luxembourg to the Court of Justice regarding their compulsory no-claims bonus systems for third-party motor insurance. In both countries, the adjustment of premiums according to the damage caused by drivers continues to be determined by detailed, mandatory criteria laid down by law that are incompatible with the freedom to market insurance products. The Commission considers that this situation is in breach of the third non-life insurance Directive (92/49/EEC).

Internal Market Commissioner Frits Bolkestein, highlighted the objective of the third non-life insurance Directive: "The freedom to market insurance products fosters competition in the interests of a large majority of drivers, who are free to choose the insurance company that will reward good drivers with lower premiums. Less competitive insurance companies will no longer be able to rely on a legislative obligation as an argument for continuing with the strict application of a system that is both too rigid and very profitable for them."

The third non-life insurance Directive (92/49/EEC), in force since 1st July 1994, abolished prior or systematic approval of pricing scales and policies, including motor insurance. The Commission considers therefore that mandatory no-claims bonus systems are in breach of the freedom to market insurance products under the Directive, in so far as they have automatic and mandatory repercussions on premiums (see judgement of the Court of Justice of 11th May 2000, Case C-296/98, Commission v. France).

The Commission does not dispute the Member States' right to introduce a scale that takes into account the damage caused by policyholders or even a uniform no-claims bonus system. However, other systems allow account to be taken of policyholders' past records without including any tariff elements, for example, by way of step-based no-claims bonus systems that do not impose any mandatory rebate/surcharge coefficient.

In countries where EU legislation is correctly applied, insurers are free to set prices and they apply no-claims discounts or raise premiums taking account, for example, of the seriousness of the claim or the number of penalty points, and not merely of the number of accidents. This increased competition benefits consumers.

The Commission has previously asked the governments of Belgium (IP/01/1491), Finland (IP/01/1491), France (IP/01/459) and Luxembourg (IP/02/217) to scrap their mandatory no-claims bonus systems. In Belgium, the automatic link between the position on the no-claims bonus scale and the premium was abolished on 1st February 2002, and the same is due to happen in Finland by the end of the spring. From then on, domestic law in this field will comply with Directive 92/49/EEC in all Member States except France and Luxembourg.

Information on current infringement proceedings against Member States is available on the Europa website at:

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