Brussels, 26/07/2004 (Agence Europe) - The Commission has sent Luxembourg a formal request to stop imposing a compulsory system of excesses in third party motor insurance. In the Commission's view, a system whereby the maximum amounts of excesses are laid down by law for all insurance policies covering third party liability in respect of vehicles habitually used in a Member State must be considered contrary to the freedom to market insurance products introduced by the third non-life insurance directive. Such a system has the effect of restricting free competition between insurance undertakings and of limiting the choice of products available to prospective policyholders, comments the Commission. If Luxembourg does not give a satisfactory answer within two months of receiving the reasoned opinion, the Commission may decide to refer the matter to the Court of Justice.