As we head towards Christmas with the reminder that a gift of a pet is “for life” and “not just for Christmas” a similar warning might be applied to those considering the 2016 “to do” list for UK general insurance.
The Vnuk case is, as we have discussed in this Blog, “not just for motor” but its implications extend to any type of general insurance in which cover is presently provided for liabilities arising from any use of a motor vehicle. As a result of Vnuk, the involuntary transfer of this risk from EL or PL classes (or indeed many other classes of coverage) to motor policies will be a concern for those seeking cover – and for providers – for any vehicles that are presently within the wider Vnuk interpretation but outside the narrower requirements of the current Road Traffic Act: in short there are a lot of vehicles that are broadly characterised as “off-road” that are going to need compulsory cover which is compliant with the European Motor Insurance Directives.
We have anticipated a Government consultation on the issue and responding (and assisting our clients) will certainly be on the list of BLM New Year Resolutions. We are aware that the issues arising from Vnuk are causing considerable discussion at a European and Government level and amongst the many Bureaux and Guarantee Funds in each EU country that deal with uninsured vehicles. These discussions seem likely to explain the apparent pause in the review of the UK legislation that needs to take place following Vnuk.
Nevertheless, the review will occur and it remains likely that the 2016 to do list will include a consideration (i) by policyholders of whether the cover presently in place is going to be compliant with the new post-Vnuk rules and (ii) by underwriters of whether they need to adjust their business models to provide the broader compulsory coverage and international claims support that is required by the Directive.
So, in considering the New Year to do list, please remember that Vnuk is not just for motor.
Written by Terry Renouf, partner, BLM