Dáil Éireann debate -
Tuesday, 13 Mar 1990

Vol. 396 No. 9

Written Answers. - EC Directives.

Seán Barrett

Question:

104 Mr. S. Barrett asked the Minister for Industry and Commerce if he will outline the principal features of the two EC directives dealing with the provisions of motor car insurance; and if he will outline the main provisions of the third directive which he indicated at the Internal Market Council press conference in February 1990 would be adopted as quickly as possible.

Minister for Industry and Commerce (Mr. O'Malley)

The Minister for the Environment is responsible for the three civil liability directives in respect of the use of motor vehicles. Two of those directives have already been adopted. The third proposed civil liability directive is awaiting a second reading by the European Parliament.

The draft motor freedom of services Directive which I referred to at the Internal Market Council press conference on 22 February 1990 is my responsibility. Its purpose is to allow a motor insurer established in a member state of the Community to transact motor insurance business on a services basis, i.e. without establishment in other member states.

The draft motor freedom of services directive subsumes motor insurance within the administrative framework set up by the second non-life insurance freedom of services directive which was adopted on 22 June 1988 — the "second Directive", 88/357/EEC, O.J. No. L 172. The supervisory provisions and other arrangements provided for in that directive will apply directly to the business of providing motor insurance throughout the Community. The quantitative criteria for distinguishing large risks laid down in that directive will apply to motor insurance.

Service insurers covering large risks will be subject to the supervision regime of the member state in which they are established. Service insurers covering mass risks, risks below the large risk size, will be subject to formal authorisation and supervision procedures of the member state into which the service is being provided. However, establishment will not be a requirement for large or mass risks services business.

The draft directive allows for the appointment of a claims settlement representative in the member state into which the service is being provided so as to avoid placing third party claimants in a less advantageous position when dealing with the services insurer.

Under the draft directive the services insurer must become a member of and contribute to the Motor Insurance Bureau/Guarantee Fund of the member state into which the service is being provided. The contribution of the services insurer will be based on the gross premium income volume from third party Class 10 motor insurance business or the number of risks in that class covered in the member state in which the service is provided.