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Instruments applied against uninsured driving Warsaw International Motor Insurance Forum 8 May 2008 Caroline Maion Manager, Legal & Technical. Instruments applied against uninsured driving. Why is uninsured driving an issue? How is the level of uninsured driving estimated? - PowerPoint PPT Presentation
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15 November 2007 Council of Bureaux 1
Instruments applied Instruments applied against against
uninsured drivinguninsured driving Warsaw International Motor Warsaw International Motor
Insurance Forum Insurance Forum 8 May 20088 May 2008
Caroline MaionManager, Legal & Technical
15 November 2007 Council of Bureaux 2
Instruments applied Instruments applied against uninsured driving against uninsured driving
1. Why is uninsured driving an issue?
2. How is the level of uninsured driving estimated?
3. What kind of good practices exist to fight against uninsured driving?
15 November 2007 Council of Bureaux 3
• 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)
15 November 2007 Council of Bureaux 4
I. Why is uninsured I. Why is uninsured driving an issue?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)
15 November 2007 Council of Bureaux 5
I. Why is uninsured I. Why is uninsured driving an issue?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.
15 November 2007 Council of Bureaux 6
I. Why is uninsured I. Why is uninsured driving an issue?driving an issue?
These costs can be significant for GF’s in MS with
• low MTPL premiums;
• and in case of major claims caused by uninsured drivers.
15 November 2007 Council of Bureaux 7
I. Why is uninsured I. Why is uninsured driving an issue?driving an issue?
• Increased insurance premiums to absorb the cost of uninsured driving.
• Cost paid by either • GF’s levies on motor insurers
• or general/special taxation
15 November 2007 Council of Bureaux 8
II. II. How is the level How is the level of uninsured driving estimated?of uninsured driving estimated?
• No single method of calculation. • Each method has its limits. • Combination of methods:
– Comparison of the GF’s 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.
15 November 2007 Council of Bureaux 9
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
15 November 2007 Council of Bureaux 10
1)1) Education/ Awareness Education/ AwarenessE.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.
15 November 2007 Council of Bureaux 11
2) MTPL cover = a 2) MTPL cover = a prerequisite for registrationprerequisite 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!
15 November 2007 Council of Bureaux 12
3) 3) Automatic renewal of the Automatic renewal of the MTPL coverMTPL 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…).
15 November 2007 Council of Bureaux 13
4) Sticker4) 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.
15 November 2007 Council of Bureaux 14
5) MTPL Premium 5) MTPL Premium Fixing OfficeFixing 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.
15 November 2007 Council of Bureaux 15
6) Punitive measures6) 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.
15 November 2007 Council of Bureaux 16
6. Punitive measures6. Punitive measuresE.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.
15 November 2007 Council of Bureaux 17
IV. ConclusionIV. 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…)
15 November 2007 Council of Bureaux 18
What are your views?What are your views?
Thank you for your attentionThank you for your attention
Website:Website: www.cobx.orgwww.cobx.orgsecretariat@cobx.org
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