International Underwriting Association of London Limited
IUA
The IUA exists to promote and enhance the business environment for international insurance and reinsurance companies operating in or through London.
ID: 58082761985-18
Lobbying Activity
Response to REFIT review of the Motor Insurance Directive
24 Jul 2018
The International Underwriting Association of London (IUA) is the focal representative and market organisation for non-Lloyd’s international and wholesale insurance and reinsurance companies operating in the London Market. It exists to promote and enhance the business environment for international insurance and reinsurance companies operating in or through London.
Our comments are limited to the issue of the scope of compulsory motor insurance addressed in the Commission’s proposal. The IUA have been part of the debate on the scope of the MID since the issue first arose in the case of Vnuk v Zararovalnica in 2014. We responded to the Commission’s 2016 Impact Assessment, to the UK Government’s consultation at the end of 2016 and to the Commission’s review of the Motor Insurance Directive (MID) in 2017.
It is the firm view of the IUA that the protection provided under the MID should not include liability for accidents irrespective where they occur. Fundamentally, the provisions of the Directive can only be effectively applied and enforced in clearly defined traffic situations.
We expect that the complexity of extending the current motor insurance regime to many millions of additional vehicles and to accidents occurring on private land will result in significant non-compliance, leading to an increase in uninsured driving and fraud.
Historically the clarity provided by the Directive has played an important role in reducing the level of uninsured driving. Following the ECJ’s ruling in the Vnuk case, the lack of a clear and understood definition as to where motor insurance law applies and where other (more appropriate) legal regimes apply puts this clarity at risk. Resources currently used to enforce compulsory motor insurance for road users will need to be devoted to the many millions of off-road vehicles and devices that could potentially brought into scope. This also threatens to undermine the consistent message to the public about the importance of driving with insurance and efforts to enforce this requirement.
While we recognise that victims of accidents that take place on private land also deserve appropriate redress, the MID is not an appropriate legal mechanism to achieve this outcome.
We expect that the complexity of extending the current motor insurance regime to many millions of additional vehicles and to accidents occurring on private land will result in significant non-compliance, leading to an increase in uninsured driving and fraud.
Our members considered that the extension of liability to private property would result in the following increased costs for the UK insurance industry stemming from, but not limited to:
1. An increased likelihood of fraudulent claims due to the number of incidents likely to take place without witnesses / CCTV and those on land over which the public does not have access. Furthermore, it is vital that vehicles can be identified accurately, while ensuring that registration identification tools (i.e. number plates) cannot be transferred between identical vehicles, in order to minimalise the potential for fraud. This will require great expense to develop registration systems for vehicles and to ensure that suppliers of vehicles enable them to be easily identified.
2.The motor (re)insurance market is likely to face a number of new liabilities that would previously have fallen to other classes of business, e.g. vehicles used in construction (tools of trade), agriculture, industrial and motor sports. Whilst there is likely to be suitable levels of capacity in both the motor insurance and reinsurance markets, consideration should be given as to the ability for (re)insurers to price (to third party compulsory levels) for low risk vehicles such as ride-on lawnmowers.
The IUA's full response on this issue has been attached.
Read full responseMeeting with Edward Bannerman (Cabinet of Vice-President Jyrki Katainen)
11 Dec 2014 · Investment initiative and CMU