Brussels, 28/03/2001 (Agence Europe) - The European Commission has decided to send France a reasoned opinion over its mandatory no-claims bonus system in third-party motor insurance. It considers that France is in breach of the principle of free service provided for by the third "non-life" insurance directive, by imposing through legislation criteria for developments in insurance premiums. France has two months to reply before the Commission decides to refer the case to the Court of Justice. A French law requires the premium payable by the policyholder to be calculated by multiplying the reference premium by a "rebate/surcharge coefficient": each annual period without accident allows for a 5% reduction in the premium of the policyholder and any accident that occurs during the year leads to an increase in the coefficient of 25%.
The Commission is not challenging the existence of a uniform scale but, it states in its press release, disputes the fact that scales are accompanied by "tariff elements with automatic and mandatory repercussions on tariffs". According to the Commission, the system prevents insurance companies from determining their insurance policy freely. "Our intention is in no way to scrap the no-claims bonus system for differentiating between good and bad drivers, but to leave insurance companies free to choose the way in which they reward good drivers through lower premiums", the Commissioner of the Internal Market, Fritz Bolkesteinu declares in a press release.
The Commission suggests that France adopt other systems that take account of the antecedents of the policyholder, without containing tariff elements, it states, proposing a system that is not only quantitative but qualitative, also taking account of the gravity of the accident, "aptitude points" and "freely assessing the economic consequences of the premium on these elements, like companies do to determine the basic premium".
The Commission has also decided to send a statement of objection , first stage of the infringement procedure, to Finland calling on it for information on its no-claims system, similar to that of France, says the Commission's spokesman of the Commissioner for the Internal Market, Jonathan Todd. He also recalled that the Commission had made contact with the Belgian authorities on the same subject, and that they had undertaken to alter their system within a few months.
At the time the European legislation was being drawn up, consumer organisations had unsuccessfully protested against the ban on setting tariffs through legislation in the insurance directive. "the no-claims bonus system an the regulatory path enable the principle of solidarity between insurers to be maintained", comments Jean-Philippe Ducart, of the Belgian consumers' association "Test Achat". The directive having been in force since 1994, "we shall not now start fighting windmills".. But the Belgian legislation being prepared provides for a "safety-net": the setting up of a central tariff office that will set reference scales to which policyholders will be able to turn in case of conflict with their insurers on the amount of their premium, said Jean-Philippe Ducart.