Fleet News

EU confirms its insurance rights

THE European Court of Justice has confirmed the right of European Union (EU) governments to force EU motor insurance providers into taking a driver's safety and accident record into account when setting policy premiums.

Judges threw out a bid by the European Commission to force France and Luxem-bourg into scrapping such requirements, written into their national laws.

Brussels had claimed these 'bonus-malus' systems broke the EU 1992 Direct Insurance Directive, by 'having automatic and compulsory effects on premium rates', and imposing unnecessary restrictions on their insurance markets. However, the court ruled that the French and Luxembourg systems were compatible with the directive, because 'they do not result in the direct setting of premium rates by the state', with insurance companies being left with leeway over the actual rates of premiums.

ECJ rulings act as precedents across the EU, so the case would effectively allow such rules to be imposed in all of its 25 member countries.

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