REFIT of European motor insurance: Vnuk one of four measures to be addressed

Having been largely silent for a year about how to tackle the Vnuk problem (i.e. the extended scope of compulsory motor insurance to any normal use, anywhere, of any motor vehicle) the European Commission appears to have picked up the pace significantly in just announcing a new four-week consultation period running from 24 July to 21 August.

The consultation paper is classed as an inception impact assessment (IIA). It is just four pages long and is being taken forward under the wide EU deregulation banner of REFIT. The REFIT work for the sixth Motor Insurance Directive (the MID, i.e. Directive 2009/103/EC) is said to cover all elements of the European compulsory insurance regime, although only four are addressed specifically in the new IIA: cross-border portability of no claims discounts, protection against insurer insolvency, minimum levels of cover, and scope, i.e. Vnuk.

The carefully worded text of the IIA points out that the Commission will decide on the way forward in respect of the first two of those by the end of 2017, but is absolutely silent on timing as regards the last two.

This link to the IIA goes to a home page that confirms the 21 August response date and has a download box allowing access to the document itself. The new IIA completely replaces the Commission’s ‘road map’ from June 2016 – published only two weeks before the UK’s referendum on EU membership – in which the Commission had appeared to favour the option of amending the MID to limit compulsory insurance to the use of vehicles in traffic.

The new IIA reads a little more neutrally, perhaps, than last year’s. It is primarily a request for views and, importantly, for data that might help inform how the Commission should address the problems raised by the extended scope of the MID as understood following the decision of the European Court in Vnuk in September 2014.

It is surely not without irony that the only Member State’s data mentioned in the IIA is the UK Government’s consultation on Vnuk which closed in April this year? In any event, the UK will have to continue to adhere to the MID until at very least it leaves the EU in March 2019. Transitional arrangements could mean that the MID has effect in the UK for some time after that.

In our view it is therefore really important for stakeholders to engage during this new short consultation period and to supply views and supporting data to the Commission. Please get in touch if we can assist with that in any way.

Portrait photograph of Alistair Kinley, Director of Policy & Government Affairs Written by Alistair Kinley, director of policy and government affairs at BLM.

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