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Brussels, 12 January 2006

Internal Market: Commission report on motor insurance issues

The European Commission has issued a report addressed to the European Parliament and the Council on two motor insurance issues – compensation bodies and third-party liability cover for trailers. Based upon various consultations carried out in 2005 with Member States, industry and the public (see IP/05/747), the report suggests possible solutions for improving compensation for victims of accidents with a trailer, which could be examined when there is a recasting of the Motor Insurance Directives in 2007-2008. The report also concludes that compensation bodies are operating smoothly in the EU and that no major revision of the Motor Insurance Directives is required at this stage. The report has been issued in the form of a Commission Staff Working Paper.

Internal Market and Services Commissioner Charlie McCreevy said: “Europeans must be able to use their cars in other Member States as they would at home – confident that they have adequate insurance coverage and that any claim will be dealt with quickly and efficiently. So I am pleased to see from our wide-ranging consultation that compensation bodies are working well in the EU. However, we do need to look more closely at how we can increase public awareness of them and improve compensation for trailer accidents."

During the preparation of the Fifth Motor Insurance Directive (2005/14/EC), the European Parliament raised some questions relating to insurance cover for trailers, in particular, whether or not there is a need to amend the definition of 'vehicle' as provided for by Article 1 of the First Motor Insurance Directive (72/166/EEC). The report concludes that no amendment is needed. However, the report does identify cases where victims might encounter difficulties in obtaining compensation for an accident with a trailer and suggests possible solutions which could be examined when there is a recasting of the Motor Insurance Directives, planned for 2007-2008.

The report also examines how 'compensation bodies' operate in practice. These bodies are designed to enable ‘visiting victims’ (i.e. people who have been injured or suffered damages outside their Member State of residence) to get faster compensation in their Member State of residence. The injured party can apply to the compensation body when an insurer has not replied to a claim within three months or when an insurer has failed to appoint a claims representative in the victim’s Member State of residence. Under Article 6 of the Fourth Motor Insurance Directive (2000/26/EC) each Member State is required to set up a compensation body. The report concludes that the compensation body mechanism operates smoothly in all Member States and hence a revision of Article 6 is not necessary. However, the report recommends that the Commission should investigate with Member States (in the context of the European Insurance and Occupational Pensions Committee) both the means of increasing at an operational level the efficiency of cooperation between compensation bodies and the need for increasing public awareness of compensation bodies.
The report and more information on motor insurance in the Internal Market are available at:

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