Luxembourg, 25/02/2003 (Agence Europe) - The Court of Justice has handed down a ruling on the Commission vs. Italy case, in which it has declared that Italian legislation imposing a price-freeze on compulsory motor insurance runs counter to Community law. The Court, however, upholds the need for insurance companies to include accidents in a database. The Italian legislation considerably restricted the liberty of Italian insurance companies and those of other Member States established in Italy or which provided services there, it explained. This constitutes a limited intervention into the compulsory motor insurance sector, which was unjustified as part of a general system of price-checks. On the other hand, the Court rejects the Commission's appeal concerning the obligation for insurance companies to communicate the accidents in their charge to a database. This information serves to fight a different kind of fraud to that covered by the Directive, which aims to avoid infringements of the principles of freedom of establishment and service, it specifies.
The 1992 Directive on direct insurance is based on the principle of freedom of tariffs and was transposed into Italian law by a decree in 1995.
In 2000, following an increase in premiums by up to 400%, Italy adopted another decree with urgent provisions to limit inflationary increases in various sectors, including compulsory motor insurance. A database had been set up to combat fraudulent practises.