FLEETS have a two-year deadline to prepare a system that will enable them to provide details of every vehicle covered by their corporate insurance policy to a new Government-backed insurance database.

The Motor Insurance Database has been created in conjunction with the police and the insurance industry and will store information on the insurance details of every vehicle in the UK.

Insurance companies have 12 months to file the policy details of every private vehicle they insure on the database. However, given the complications of vehicles joining and leaving fleets on a regular basis, employers will be responsible for sending their own insurance details directly to the new database.

The database will act as the operating mechanism for the European Commission's Fourth Motor Insurance Directive, which comes into force in 2003 and will require fleets to keep exact records of every vehicle covered by their insurance policies. This will force fleets to update their vehicle records on a daily basis, including daily rental vehicles and plant.

Insurers or fleet operators will be able to supply information over the internet. But a password and operating code, held by the insurer, will be needed to submit the data.

In the UK about 1.25 million drivers are uninsured, the equivalent of one car in 20, which costs the insurance industry more than £400 million a year.

Similar databases are used in Germany, Holland, Denmark, Sweden, Belgium and Spain, and have cut insurance evasion to about 1%.

The Association of Chief Police Officers estimates that a saving of £15 million a year will be achieved because officers will no longer have to waste time checking details of 'honest' drivers' insurance policies.

Safeguards will be in place to make sure that only the police have access to drivers' personal details.

Home Office Minister Bob Ainsworth said: 'The new database is good news for the victims of accidents because it will help to reduce the number of motorists who drive without insurance cover. It is also good news for the law-abiding motorists who will be relieved of the burden of subsidising the dishonest motorist.'

Global information solutions company Experian built and will manage the database. It will be linked directly to the Police National Computer and can be accessed by police carrying out roadside checks.