8.3 Chapter 3: the legal context

The green card system derives its legitimacy from the Economic Commission for Europe of the United Nations (UNECE). The UNECE enabled the International Insurance Certificate or green card to be recognised as a border document by national frontier authorities and accepted as a basis for the settlement of claims after an accident caused by a visiting motor vehicle. The role of the UNECE in the green card system and its relationship with the organisation of the Bureaux, the Council of Bureaux, is analysed.

The EU plays a central role in the development of the protection provided by MTPL insurance. The powers of the EU and the instruments available to it are discussed, both in general and in the field of MTPL insurance. To this end, it is described how compulsory insurance has been implemented: under which conditions can an insurer enter the MTPL insurance market of the EU and what requirements must such an insurer meet?

Subsequently, the compulsory insurance is analysed in more detail. In principle, each motor vehicle normally based in a Member State must be insured in the Member State whose registration plate it bears. This applies not only to motor vehicles in the strict sense of the word, but also to trailers and semitrailers. Vehicles with a temporary registration plate must be insured in the Member State where the registration plate was issued as well.

It is explained that, if a resident of a Member State purchases a vehicle in another Member State than the State of his residence, the insurance obligation will temporarily (i.e. for the first thirty days after delivery of the vehicle) 'move' to the Member State of destination, even if the vehicle has not yet been registered in the Jatter Member State. During this thirty-day period, the vehicle is still 'normally based' in the Member State where it was purchased. Without further legislation, this gives rise to an insoluble problem with regard to claim settlement, especially if the accident occurs in the Member State where the vehicle was purchased. I analyse the practical problems encountered with regard to this regulation of Article 15 of the Directive and argue that the regulation should be abolished, as the problems it gives rise to, seem to exceed the problems it is supposed to solve. The old situation would then revive: the buyer would be required to insure his new property in the Member State of purchase and of which it bears the permanent or temporary registration plate.

In principle, all motor vehicles normally based in a Member State must be insured against statutory liability. However, the Directive allows two types of exceptions: certain (legal or natural) persons certain types of motor vehicles may be exempted from compulsory insurance.

The first category is mainly used by Member States to exempt the state and other 'financially strong' motor vehicle owners from compulsory insurance. The Member State using this possibility must provide for a body - in its own country and in other Member States - responsible for the settlement of claims in respect of accidents caused by these vehicles. Most Member States have not designated a body in the other Member States. As a consequence the victim of an accident in a Member State other than the State where the exempted vehicle is normally based can apply to the green card bureau.

The second exception to the insurance obligation relates to vehicles that are deemed to represent a low risk in road traffic: agricultural equipment, operating equipment, slow vehicles and vehicles that are not frequently used on public roads. In that case, the victim of an accident can apply to the guarantee fund. The exception to the insurance obligation must also be respected by the other Member States when the exempted vehicle crosses the border. In case of an accident in another Member State, the guarantee fund of the Member State of the accident is competent as well. The Directive has overlooked that, in these cases, the exempted vehicle is still normally based in the Member State of registration or residence of the owner, so that it would be more logical to give the victim of an accident in another Member State a claim against the Bureau of that country.

The Directive restricts the possibilities for Member States to check compliance with compulsory insurance by the owner of a visiting motor vehicle. Vehicles normally based in a Member State cannot be checked in another Member State - unless in a non-systematic and non-discriminatory manner and only in the context of a check not aimed exclusively at compliance with compulsory insurance. The same applies to vehicles normally based in non-Member States. The reasoning of the European legislature here is that it is not the responsibility of the visited Member State to enforce compliance with compulsory insurance, but that of the Member State where the visiting vehicle is normally based; in line with this, the authorities of the Member State where a vehicle normally based in a third country enters the European Union must check for the presence of a green card. This argument is not convincing: more and more EU vehicles are circulating in other Member States than their Member State of origin for longer periods of time and this seriously complicates the possibilities to enforce compliance with compulsory insurance. In addition, Member States may suspend or revoke the registration plates of vehicles normally based in their territory for a variety of reasons (including non-compliance with compulsory insurance), as a result of which the registration plate no longer corresponds to the vehicle. In the system of the Directive the burden of an accident will then be borne by the guarantee fund of the Member State of the accident.

With regard to vehicles from third countries for which a valid green card must have been issued, the validity of that green card can only be checked at the external borders of the EU. As a result there is no guarantee that the card is still valid at the time of an accident. In that case, the damages must be borne by the guarantee fund of the Member State where the accident occurred as well.

I argue therefore that there should be more opportunities to perform checks, in combination with a restriction of the scope of the concept of 'a registration plate that does not, or no longer corresponds to, the vehicle' (as I will further discuss below).

I argue that the Dutch MTPL legislation, de Wet aansprakelijkheidsverzekering motorrijtuigen (Wam), does not conform to the Directive in two respects. Firstly, according to the Wam, there is no requirement for articulated vehicles to be independently insured, while the Directive does require a separate insurance. According to the Wam, so long as trailers and semitrailers have not come safely to a standstill, away from traffic, they are insured under the policy of the towing vehicle. This vehicle need not necessary be normally based in the Netherlands and, under certain circumstances, may not be identifiable either. The Dutch solution for insurance of articulated vehicles as outlined in the Wam, is not in conformity with the Directive and the Wam should therefore be adjusted.

The second aspect of the Wam which should be amended concerns Article 2, seventh paragraph, under d), which provides that 'vehicles with a special registration plate with a limited term of validity' (so-called GN and BN registration plates) are deemed to be 'normally based abroad'. I argue that the provision of Article 2, seventh paragraph, under d) is contrary to the Directive which clearly states that vehicles with a temporary registration plate must be insured on the same basis as vehicles with permanent registration plates. In addition, I argue that it is unclear who is responsible for claim settlement, especially if the accident is caused in a Member State other than the Netherlands by an uninsured vehicle with such a registration plate. It has to be borne in mind that the Dutch Bureau is only responsible towards its foreign sister organisation for the vehicles normally based in the Netherlands and this is precisely not the case under the Wam.