Instruments applied against

1

• Instruments applied against
• uninsured driving
• Warsaw International Motor
• Insurance Forum
• 8 May 2008
• Caroline Maion
• Manager, Legal Technical

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Instruments applied against uninsured driving

• Why is uninsured driving an issue?
• How is the level of uninsured driving estimated?
• What kind of good practices exist to fight
  against uninsured driving?

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• CoB manages the International Motor
  Insurance/Green Card system under the aegis of
  the UN ECE
• 44 Members (National Motor Insurers Bureaux)
• Mainly from Europe and Countries bordering the
  Caspian Mediterranean Sea
• CoB also ensures secretarial services for the 4th
  MID bodies (GF CB of the 30 EEA MS)

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I. Why is uninsured driving an issue?

• Uninsured driving has a cost.
• /-3 of EEA motorists are uninsured.
• /- 11 is the increased cost incurred to pay
  for uninsured driving for an average annual MTPL
  premium of below 500 in the EEA.
• ( rounded sums for 2003)

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I. Why is uninsured driving an issue?

• This cost is not spread equally across the EEA
• For MS with low levels of uninsured driving (e.g.
  DE), the cost can be less than 1 per policy.
• In MS with higher levels of non-insurance, the
  cost can reach 50 per policyholder.

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I. Why is uninsured driving an issue?

• These costs can be significant for GFs in MS
  with
• low MTPL premiums
• and in case of major claims caused by uninsured
  drivers.

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I. Why is uninsured driving an issue?

• Increased insurance premiums to absorb the cost
  of uninsured driving.
• Cost paid by either
• GFs levies on motor insurers
• or general/special taxation

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II. How is the level of uninsured driving
estimated?

• No single method of calculation.
• Each method has its limits.
• Combination of methods
• Comparison of the GFs claims related to
  uninsured vehicles with those of the national
  market
• Comparison of the yearly estimates done by the GF
  on the cost of accidents caused by uninsured
  vehicles with the costs of accidents at national
  level.

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III. Good practices

• CoB survey
• 12 Bureaux with the lowest rate of uninsured
  driving were consulted in March 2007
• AT, BE, CH/LI, DE, DK, FI, IT, IS, LU, NL, PT
  SE
• ) 6 Good practices

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1) Education/ Awareness

• E.g. CH/LI
• Educational campaigns public advertisements at
  national level
• - to explain to the citizens with simple words
  the reasons and needs for insuring a vehicle.
• To improve citizens' awareness by providing them
  with a better understanding on
• why a vehicle must be insured against 3rd party
  liability
• what the consequences are of driving an uninsured
  vehicle.

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2) MTPL cover a prerequisite for registration

• Provision of valid MTPL cover prior to the
  delivery of the registration plates
• (e.g. AT, BE, DE, DK, CH/LI,)
• This practice is relatively widespread!

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3) Automatic renewal of the MTPL cover

• Followed by adequate measures in the event of
  unpaid premiums (e.g. DK)
• MTPL cover automatically renewed until the
  removal of the plates by the police in the event
  of unpaid premiums (e.g. 4 weeks).
• The insurer compensated the victim for accidents
  occurring during the time needed to withdraw the
  plates.
• The insurer has a right of recourse against the
  defaulting MTPL policyholder.
• The insurer sends reminders to the defaulting
  policyholder as a warning about the cancellation
  of the MTPL cover.
• Practice often related to
• a reporting system
• efficient IT links between relevant authorities
  (Info. Centre, GF, etc).

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4) Sticker

• Sticker on the windscreen showing the expiry date
  of the MTPL cover
• (e.g. IT)
• Practice used by some MS.
• Other MS stopped this practice.
• Possible dissuasive effect on a potentially
  defaulting policyholder.

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5) MTPL Premium Fixing Office

• BE, ES FR
• Some uninsured drivers faced with
• unaffordable costs for the premium or
• the unavailability of the MTPL cover on the
  market
• (due to high rate of accidents, delay in the
  premium payment, etc..).
• 3 MS set up a scheme allowing those motorists
  under strict conditions to obtain MTPL cover
  either with the help of a so-called MTPL Premium
  Fixing Office or within the GF acting as a
  direct insurer.

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6) Punitive measures

• Penal sanctions fines usually higher than the
  MTPL premium.
• Withdrawal of registration plates by the
  Enforcement Authorities.
• Insurers right of recourse against the person
  liable to insure the vehicle.

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6. Punitive measures

• E.g. the SE experience
• Unrecoverable costs transferred to the uninsured
  motorists instead of being passed on to the mass
  of law-abiding motorists as done before.
• Right to levy a special charge ( MTPL charge)
  granted to the Swedish Motor Insurers Bureau by
  law on vehicle owners as long as their vehicle
  remains uninsured.
• MTPL charge can be 10 higher than the highest
  MTPL premium applied by any insurer over the same
  period of time for the same kind of vehicle used
  in the same way.
• The percentage of uninsured vehicles decreased
• from 1.83 to 1.31 between 1978 and 1998
• to 0.95 after the increase in MTPL charges in
  1999.

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IV. Conclusion

• Catalogue of good practice
• Some of these practices are good for some MS but
  might not be so good for others.
• Important not to impose any practice at
  international level,
• but to allow each MS to choose the most suitable
  practice in accordance with its own situation
  (market ,economy)

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• What are your views?
• Thank you for your attention
• Website www.cobx.org
• secretariat_at_cobx.org