The Fourth EU Directive on Motor Insurance

What is the purpose of the directive?

The fourth EU Motor Insurance Directive became law throughout the EU on 20th January 2003. Its key objective was to improve the claims handling process for EU third parties claiming against an insurer based in another EU member state, and one of its requirements is that the insurer of a vehicle can be readily identifiable from the vehicle registration number. Every registered vehicle in circulation falls within the provision of this directive.

The UK insurance industry, led by the Motor Insurers' Information Centre (M.I.I.C.), has responded to this requirement by developing the Motor Insurance Database (M.I.D.). This database records all vehicles and details of the motor insurance policy relating to that vehicle. It went live for individually insured vehicles in July 2001, and was fully operational by January 2003.

In addition to meeting the requirements of the Directive, The M.I.D. will also be used to tackle the problem of uninsured driving in the UK. It is estimated that one in 20 drivers on our roads is uninsured, and this situation is getting worse. The police can now access the M.I.D. either from the roadside using hand-held computers or from police stations, enabling them to check almost immediately whether or not a driver is insured. In many cases, this can remove the need for motorists to produce evidence of insurance at a police station.

What is the relevance to individuals?

Whilst most data for the M.I.D is entered by insurance companies for each of their policy holders, motor fleet and motor trade policyholders may be required to provide vehicle data directly to the M.I.D.

What data is provided?

The following details are mandatory and must therefore be entered on to the M.I.D:

• The registration number of every vehicle insured under each policy
• The date on which cover began for each vehicle
• The date on which cover ceased for each vehicle

Make and model details are considered by the M.I.I.C. to be preferred data, as this can assist the police in the identification of vehicles on the M.I.D. As such, this data is requested by many motor insurers. In addition, although not required by the Directive, some motor insurers may request additional information such as engine capacity, gross vehicle weight or value.

How does data get on the M.I.D?

Motor insurance companies input the information directly. Others can access the database via the internet, or by faxing a spreadsheet. If you are a fleet policyholder or motor trader you should have an agreement in place with your insurance broker as to who will input the information, and how.

How quickly does the information have to be supplied?

The rules state that the database must not be more than 14 days out of date. For this reason it is important that insurance brokers are in a position to pass on data quickly, and renewal of motor insurance must therefore be completed by the renewal date at the latest. It is also important that any policy changes such as a change of vehicle are notified to your insurance adviser immediately.