As part of our celebrations to mark the 75th Anniversary of COB, we wanted to reflect on the rich and meaningful history that has made the organisation what it is today.
Over the course of the year this series of articles will focus on key ‘milestones’ from the life of COB, telling the story behind these moments and why these events mattered.
We hope the series will help provide a better understanding of COB, our mission and what has driven our activity over the last 75 years.
In the previous article of this series, we examined the 1972 milestone when the European Economic Community (EEC) adopted the first Motor Insurance Directive (MID), marking the start of an ongoing process. The second MID was introduced in 1984, followed by the third MID in 1990.
In this article, we will delve into the details of the fourth MID adopted in 2000, which radically impacted the COB system. Discover why.
The need for a protection mechanism for visiting motorists
As explained earlier1, the Motor Insurance Directives (MIDs) adopted in 1972, 1984, and 1990 established a framework to further harmonise motor insurance legislation within the European Economic Area (EEA).
However, a significant challenge persisted.
The Green Card system only offers protection to victims of accidents caused by visiting motorists in their own country and does not address the cases of accidents involving visiting victims abroad.
Although the earlier MIDs facilitated the process in such cases, many practical difficulties remained. Among the key challenges were navigating foreign legal proceedings, language barriers and administrative differences.
In the mid-1990s, COB began addressing this issue within a dedicated Working Group, following a request from the European Commission. The Working Group concluded that COB alone could not provide a complete solution, as several member Bureaux were limited in their ability to assume financial responsibilities beyond the Green Card system.
This prompted the European Union to take the initiative of developing a separate protection mechanism containing compulsory and enforceable provisions.
[1] see article ‘1972 – Introduction of the first Motor Insurance Directive’
The fourth Motor Insurance Directive
The fourth MID was adopted in May 2000, introducing the innovative concept of 'Protection of Visitors', a sort of ‘mirror image’ of the Green Card system.
While the Green Card system protects victims of accidents caused by a foreign vehicle in their own country of residence, the Protection of Visitors scheme was designed, as a complementary measure, to protect victims of accidents occurring outside their country of residence, but mainly within the territory of the EEA.
In practice, the main concept was to establish a system where victims of accidents abroad could submit their compensation claims in their own language and within their own country of residence.
To achieve this, the fourth MID provided for the creation of new entities in each EEA Member State: the Claims Representatives, the Compensation Bodies, and the Information Centres.
Member States were required to implement the fourth MID into their national legislation by 20 July 2002, with the system becoming applicable no later than 20 January 2003.
COB becomes a ‘two-pillar’ system
The fourth MID required the Compensation Bodies to conclude an agreement regarding their functions and obligations, as well as the reimbursements that should take place between them. This agreement was concluded in the framework of CEA (now Insurance Europe) on 29 April 2002 and is still today referred to as ‘the 2002 Agreement’. It was not only subscribed by Compensation Bodies but also by Guarantee Funds.
With the entry into force of the fourth MID and the conclusion of the 2002 Agreement, questions soon arose about establishing an international structure to manage the activities of the ‘EU MID entities’. In November 2005, an International Colloquium was organised in Paris, hosted by the French Guarantee Fund and attended by representatives of the Guarantee Funds, Compensation Bodies and Information Centres from the European Economic Area (EEA). During this event, the idea of assigning the administrative services to COB was first mentioned.
With 20 years of experience as an independent secretariat and a dedicated staff, COB was considered the best choice to take over the secretariat services of the EU MIDs. Additionally, by that time, another significant change had been agreed upon: relocating the Secretariat from London to Brussels for a more central location, closer to the EU institutions. The new Brussels Secretariat was inaugurated in May 2006.
Picture taken during the 2005 International Colloquium in Paris @COB Archives
In November 2006, in Rotterdam, it was officially approved that COB would offer secretariat services to the EU MID entities, marking an important milestone in COB’s history. COB became a ‘two-pillar’ system, encompassing both the Green Card pillar and the EU MID pillar - later renamed the Protection of Visitors pillar.
This profoundly impacted the Secretariat's ways of working, requiring an increase in staff and the expansion of expertise across various fields such as legal, IT, and other aspects relevant to COB's operations.
Since then, the EU Motor Insurance Directives have continued to evolve. The fifth MID adopted in 2005, introduced a new method for calculating and establishing minimum coverage amounts.
By 2009, all MIDs were consolidated into a single Codified Directive to enhance accessibility and usability for citizens.
In 2021, the sixth MID amended the Codified Directive, updating legal definitions, compulsory cover levels, and provisions for compensating victims in cases of insolvency of an insurance undertaking.
