Meeting with the Romanian Motor Insurers’ Bureau Bucharest 19 th August 2004 Ulf Lemor

The 4 th motor insurance directive - preconditions Romania’s accession to the EU Adhesion to section III of the Internal Regulation The functioning of the Guarantee Funds

Normal case: 1 st step: The victim asks the information centre in his home country for information on the responsible insurer 2 nd step: the victim asks the claims representative in his home country to settle the claim; the claim should be settled respecting certain procedures and delays Exception: 3 rd step: If not, the victim can address himself to the compensation body in his home country who will then settle the claim 4th Motor Insurance Directive Current developments of motor insurance in Europe 3

Information Centre Provides the victim / his lawyer with information on: name and address of the responsible insurer number of insurance policy name and address of the claims representative in the country of residence of the victim and, if victim has a legitimate interest on name and address of vehicle owner the usual driver or the registered keeper of the vehicle. 4

Compensation body Intervenes at request of the victim in the following situations: no reasoned reply within 3-months delay no claims representative nominated no identification of vehicle no identification of insurer within 2 months after accident 5

Compensation body Situations causing problems: Reasoned reply  criteria? 2-months delay for action: –What kind of action? –Right of the insurer after the 2 months? Delay for settlement? Obligation for consultation? Legal action against the compensation body? 6

Merger of the national TPL with the Green Card System Is it possible to collect a special premium for the issue of Green Cards? Every TPL-insurer would be entitled to issue Green Cards even if he is not a member of the national Bureau 7 Possible disadvantages (I)

Merger of the national TPL with the Green Card System If an uninsured vehicle causes an accident abroad, the Bureau has to compensate the victim with a very few chances to get the money back. In addition the Bureau has to compensate according to the minimum sums of the country of the accident which are normally higher. 8 Possible disadvantages (II)

Merger of the national TPL with the Green Card System If the TPL and the Green Card System are merged, it has to be secured that the Bureau has sufficient financial resources. In case of an uninsured rate of 40% – 60 % the policy holder have to pay for the damages which are caused by 40 % uninsured drivers. All TPL-insurer in Romania must contribute to the financing of the Bureau. The calculation of the premium has to take into account that the Bureau disposes of sufficient financial resources to compensate all national and international claims 9 Possible solution

The idea of a guarantee fund Legal background 10 2 nd motor insurance directive 1983 Strasbourg Agreement 1959 Mandatory foundation of guarantee funds on European level compensation for material / personal damage in case of vehicles are illegally uninsured / cannot be identified

Advancement of the Guarantee Fund payment must not depend on victim proving the unsuccessful claim of the liable person 11 in case of dispute over the competence of the insurer, the guarantee fund regulates the damage for the person concerned 3 rd motor insurance directive 1990

German Guarantee Fund A registered private law association Accessible to all insurance companies which offer motor third party liability in Germany Voluntary membership all German insurers affiliated A registered private law association Accessible to all insurance companies which offer motor third party liability in Germany Voluntary membership all German insurers affiliated 12 Form of organisation

German Guarantee Fund 13 Funding The costs are allocated to all market participants. Allocation in accordance with the respective market share. Contributions have to be computed on the previous year’s figures. If necessary a renewed apportionment can be made / a surplus could be disbursed. The costs are allocated to all market participants. Allocation in accordance with the respective market share. Contributions have to be computed on the previous year’s figures. If necessary a renewed apportionment can be made / a surplus could be disbursed.

Conditions and scope of compensation in Germany all physical persons are entitled to claim only damages caused by a motor vehicle / trailer no compensation from a third source (e.g. the comprehensive insurer) Limitation after three years from date of knowledge if the involved car cannot be traced, exclusion of the claims for vehicle damage 14

Cover in case of insolvency not foreseen by the European legislation cover provided in: –Germany, Belgium, UK, France, Italy, Switzerland… no cover provided in: –Sweden, Denmark, Finland, Greece, Spain… agreement between insurers: cover for cross-border accidents 15

Separated or integrated system? Separated system: German, Switzerland, France, Italy, Spain, Portugal, Greece, Denmark, Sweden, Finland Integrated system: UK, Ireland, Belgium Possible conflict of interest Guarantee funds are supervised by the state whereas the Green Card System normally not Risk of misuse of the respective funds for the other association’s purpose 16