What is the Green Card system?
The Green Card system is a protection mechanism for victims of cross-border road traffic accidents caused by foreign vehicles.
It facilitates the flow of cross-border road traffic in Europe and ensures the compensation of victims of accidents caused by foreign motorists by guaranteeing sufficient third party liability to the latter.
The system consists of 50 member countries represented by 46 Green Card Bureaux.
The Green Card system is conditioned upon the existence of:
- A Green Card Bureau – established in each participating country
- A valid Green Card – issued by a Green Card Bureau of one of the participating countries
AIM OF THE SYSTEM =
To enable a vehicle from country A
to circulate in country B
while being covered by the original MTPL insurance
subscribed in country A
The system was founded in 1949, stimulated by the United Nations Economic Commission for Europe and on the basis of Recommendation No. 5 adopted by the Working Party on Road Transport of the Inland Transport Committee.
The initial twofold objective of the system was to facilitate:
- The crossing of borders = Motorists are released from the obligation of taking out a national insurance contract at the border of the 50 member countries if possessing a Green Card.
- The claims settlement = Victims of cross-border road traffic accidents should properly be compensated and not be prejudiced by the fact that the accident was caused by a foreign vehicle.
The Green Card system consists of 46 Green Card Bureaux representing more than 1500 motor insurers in 50 countries in Europe, North Africa and the Middle East:
A Green Card Bureau is an organisation established in each country of the Green Card system, guaranteeing that a victim suffering damage from a road traffic accident caused by a foreign vehicle (from another participating country) will be compensated in the country of the accident.
The Bureau of the country of the accident can, subsequently, recover all compensations paid from the Bureau of the country from which the liable vehicle originates.
Each Green Card Bureau represents the motor liability insurers of its country.
A Green Card Bureau has two functions:
- As a "Bureau of the country of the accident" (or handling Bureau), it has responsibility for the handling and settlement of claims arising from accidents caused by visiting vehicles. When compensating victims, the handling Bureau will apply the rules of insurance and liability law of the country of the accident.
- As a Guaranteeing Bureau it guarantees certificates of Motor Insurance, Green Cards, which are issued by its member insurance companies to their policyholders.
Green Card Bureaux cooperate on the basis of the Internal Regulations and operate with the recognition and approval of their governments.
The geographical scope of the Green Card System extends to:
- European countries lying to the West of the Ural Mountains and the Caspian Sea
- Countries bordering the Mediterranean Sea.
Apart from the existing members of the Green Card System, the following countries are eligible for future COB Membership: Algeria, Armenia, Egypt, Georgia, Kazakhstan, Lebanon, Libya and Syria.
Language = official language(s) of the issuing country
+ title of the document in English and French
Format = horizontal or vertical
(determined by the United Nations Economic Commission for Europe - UNECE)
The IMIC (International Motor Insurance Certificate), also known as the Green Card, is an international certificate of insurance accepted without any obstacle or cost by the authorities of all 50 countries of the Green Card system.
A Green Card can be delivered by a Bureau, an insurance undertaking or an insurance intermediary, but it is always issued under the authority of a Green Card Bureau.
- It certifies that a visiting vehicle has at least the minimum compulsory Motor Third Party Liability Insurance cover as required by the law of the country visited.
- It provides a guarantee for the visited country that the insurer of the vehicle's country of origin will reimburse the victim's damage in accordance with the rules applicable in the visited country. In this way, the victim of an accident caused by a foreign vehicle is properly compensated for the damage suffered.
The introduction of the Green Card system was an important contribution to facilitate international traffic. Nevertheless, showing a document at each border is still time-consuming and creates obstacles to the free movement of persons and goods.
For this reason, encouraged by European initiatives, several Green Card member countries replaced the Green Card by the Multilateral Agreement (MA).
Today, 36 of the 46 countries participating in the Green Card system apply the Multilateral Agreement:
- The 27 Member States of the European Union;
- 3 additional European countries participating to the European Economic Area: Iceland, Liechtenstein and Norway;
- 6 additional countries participating to this system by way of agreement: Andorra, Bosnia and Herzegovina, Montenegro, Serbia, Switzerland and the United Kingdom.
The MA Signatory Bureaux recognise each other’s MTPL insurance on the basis of the origin of the vehicle (based on the notion of ‘territory in which a vehicle is normally based’, as described in article 1.4 of the Codified Directive) . Consequently, the Green Card is no longer a required document when crossing the borders for motorists from those countries!
NOTE: in some countries, the Green Card is more than only an international proof of insurance. Certain countries have turned the Green Card into a national proof of insurance, on the basis of national legislation. Despite what is explained above, it might therefore still be necessary to have a Green Card, but not for travelling internationally.
According to the rules of the Green Card System, the Bureau of the country of the accident is competent to receive and handle claims addressed by victims having suffered an accident caused by a foreign vehicle (originating from another participating country).
However, the Green Card System also allows motor insurers to nominate correspondents in other participating countries.
This correspondent will then be responsible to handle all claims arising from accidents occurred in the country where the correspondent is nominated and caused by (foreign) vehicles insured by the (foreign) motor insurer that has nominated the correspondent.
The correspondent acts in the name of the Green Card Bureau of the country where the correspondent is nominated and for the account of the foreign insurer that has nominated the correspondent.
The nomination of correspondents is a possibility for insurers, not an obligation.
The Green Card Bureau of the country of the accident will guarantee the quality of the claims handling process by the correspondent and the Bureau continues to bear the final responsibility for the compensation of the damage caused.
Each Bureau must establish and publish the conditions under which the Bureau grants, refuses or withdraws the approval of correspondents.
In that context the COB agreed on the use by the Bureaux of the 3 following documents: The model for a Correspondents’ Charter, The Handling and Paying Model Agreement , The Rules on Outsourcing.