Fleet News

EC insurance investigation

The European Commission is referring France and Luxembourg to the Court of Justice regarding their no-claims bonus systems for third-party motor insurance.

'In both countries,' the Commission said, 'the adjustment of premiums according to the damage caused by drivers continues to be determined by detailed, mandatory criteria laid down by law that are incompatible with the freedom to market insurance products.'

The Commission said it considers this situation is in breach of a third non-life insurance Directive.

'The freedom to market insurance products fosters competition in the interest of a large majority of drivers who are free to choose the insurance company that will reward good drivers with lower premiums,' said EC internal market commissioner Fritz Bolkestein.

'Less competitive insurance companies will no longer be able to rely on a legislative obligation as an argument for continuing with the strict application of a system that is both too rigid and very profitable for them.'

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