The history of the NGF, the NBI and the CoB is closely linked with the increasing mobility of motorists, both nationally and internationally. The historical process that has led to today’s well developed insurance coverage and protection of road accident victims can be illustrated by means of various agreements.
The history of the NBI
- The Green Card Agreement
- The London Agreement (replaced by the Internal Regulations)
- The Multilateral Guarantee Agreement or Plates Agreement (replaced by the Internal Regulations)
- The Internal Regulations (in force since 1 July 2003)
- The Protection of Visitors Agreement
In its Recommendation No. 5, which was drafted in 1949, the United Nations in Geneva (Economic Commission for Europe, Road Transport Sub-Committee) called upon the governments of the European countries to adopt common standards to ensure that road accident victims would benefit from sufficient insurance cover in the event of an accident for which a foreign motorist is liable. The idea was therefore to improve the protection of domestic victims of road accidents vis-à-vis foreign motorists who were liable so that victims of road accidents would no longer be forced to pursue their claims abroad. The following points had to be taken into consideration: On the one hand, injured parties should not suffer any disadvantage due to the fact that the accident was caused by a foreign vehicle (protection of victims of road accidents). On the other hand, when entering other countries, motorists should not be held up by tedious border formalities to comply with the national insurance requirements of the country which they wanted to enter.
The Green Card system helped to harmonise the insurance requirements to be met when entering another country as well as cross-border claims settlement procedures. At the beginning of the 1950s, the London Agreement translated the United Nations' recommendation into practice by introducing the International Insurance Card (the so-called "Green Card"), while the Multilateral Guarantee Agreement, effective as of 1973, was no longer geared to the Green Card; instead, it was focused on the regular number plates of motor vehicles. All the member states of the European Union and the European Economic Area, as well as Andorra, Croatia and Switzerland, have acceded to this Multilateral Guarantee Agreement to date. When citizens from these countries enter any of the other countries that are parties to the Agreement, they no longer need the Green Card; their registration plates are sufficient to prove that they are insured. The "False Plates Agreement", which was signed by all bureaux of the Multilateral Guarantee Agreement, entered into force on 1 October 1993. Under this Agreement, losses incurred due to accidents caused by vehicles with false or falsified registration plates had to be covered by the country which had issued the last regular registration plates for the vehicle concerned. This provision remained in effect until the end of June 2003. Article 11.2 of the Internal Regulations, which entered into force on 1 July 2003, stipulates that if a vehicle with false registration plates is involved in an accident, the territory in which the accident occurred is deemed to be the territory where the vehicle was normally based; any resulting claim therefore has to be settled by the guarantee fund of the country in which the accident had occurred. (However, because of a special suspensive clause, this does not yet apply in Portugal or to vehicles from this country.)
The official "False Plates Agreement", which was signed by all the bureaux of the Multilateral Guarantee Agreement, entered into force on 1 October 1993. This Agreement provided that if a vehicle with false or falsified registration plates was involved in an accident, any resulting claim had to be settled by the country which had issued the last regular registration plates to the vehicle concerned. This Agreement was repealed as of 11 June 2007.
The Temporary Plates Agreement entered into force on 1 January 1996. Under this Agreement, the insurance cover for the vehicle owner ended on the date displayed on the registration plate. However, the insurers declared that they would accept third party claims from accidents that occurred during a period of 1 year from the expiry date displayed on the registration plates. This Agreement was repealed as of 11 June 2007.
The Green Card System and/or the agreements mentioned above guarantee that the Green Card or the vehicle registration plates will be accepted as sufficient proof that a motor vehicle is adequately insured when entering another country. Foreign motor vehicles that enter another country are deemed to meet the minimum insurance requirements in the country visited. As a result, third party claims arising from accidents abroad will be settled in accordance with the minimum standards applying in the country where the accident occurred. In addition, claims will be settled by a representative of the foreign insurer approved by the national bureau of insurance.
The London Agreement (replaced as of 1 July 2003 by the Internal Regulations)
The London Agreement was based on the following principles which essentially still apply today under the new agreement (Internal Regulations), which has been in force since 1 July 2003:
1. In each of the member states, all the motor insurers establish a National Bureau of Insurance. All of them are members of this central organisation. The National Bureau of Insurance is recognised by the government of its country. This National Bureau of Insurance generally has two functions:
a. the "Paying Bureau" (today: the "Guaranteeing Bureau")
In the role of the "Paying Bureau", the National Bureau of Insurance (NBI) supplies the Green Card - a standardised international Certificate of Insurance - to its members who issue the Card to their policyholders (the NBI is therefore also referred to as the "Issuing Bureau"). The principle of territoriality always applies. A National Bureau of Insurance issues the Green Card for all motor vehicles in its area of responsibility (CH: also for FL; I: also for San Marino and the Vatican State; F: also for Monaco, etc.). The "Paying Bureau" is responsible for fulfilling the obligations to the "Handling Bureau" and is secondarily liable - along with the insurer - for the performance of the obligations under the latter's contract and/or under the Green Card and the insurance agreements.
b. the "Handling Bureau"
In the role of the "Handling Bureau", the NBI is generally responsible for setting cross-border third-party claims arising from accidents involving foreign motor vehicles with a Green Card or, pursuant to the Plates Agreement, from accidents caused on its territory. The "Handling Bureau" may settle a claim in accordance with the provisions of the international insurance agreements and its national law. In the event of a loss, the Bureau of the visited country will settle the claim and guarantee that the claimants will be indemnified by the insurer, if the latter has been identified.
The insurer, whose policy is always subject to the law of the issuing state, cannot invoke possibly less extensive contractual provisions.
The rule is that:
Regardless of the original cover, the minimum standard that is guaranteed is the standard that applies under the legislation in the country where the accident occurred.
- The original cover is guaranteed if the latter is higher than the minimum standard in the country where the accident occurred (this applies multilaterally only within the European Union and in Switzerland with regard to motor vehicles entering the country).
- Defences arising from the contract cannot be invoked if this is ruled out by the legislation in the country where the accident occurred.
The Green Card is recognised by the member states like an insurance policy.
3. The Bureaux ensure among themselves that the expenses incurred for the settlement of claims will be reimbursed. The Bureau that has issued the Green Card must guarantee the reimbursement of all claims-related expenses with the proviso that the expenses must be substantiated by documentary evidence. First and foremost, however, the Bureau’s members (insurers) will have to pay these expenses.
The actual sum refunded to the “Handling Bureau” is composed of the compensation paid, the external expenses for the settlement of the claim, and a handling fee precisely defined by the Council of Bureaux (CoB) for the purpose of covering all other expenses. This means that the sum that is refunded covers not only the actual compensation paid to the injured party but also a handling fee for the settlement of the claim.
4. All National Bureaux of Insurance are nowadays also members of a central umbrella organisation, the Council of Bureaux (CoB). The CoB is responsible for ensuring that the Green Card System works properly. The CoB’s secretariat was originally in London (and is now in Brussels).
The Multilateral Guarantee Agreement (replaced as of 1 July 2003 by the Internal Regulations)
Under the "Multilateral Guarantee Agreement between National Insurers' Bureaux" (also referred to as the "Plates Agreement"), a motor vehicle's registration plates replace the Green Card as proof of the fact that the vehicle is covered by insurance abroad. As time went by, more and more countries issued registration plates only if vehicles were covered by motor insurance. As a result, motorists no longer needed an additional certificate of insurance. For this reason, many countries stopped checking motorists to see if they had a Green Card.
An EC Directive of the year 1972 reflected this development and provided that vehicles normally based in a member state of the European Community no longer needed a Green Card when entering another member state. This EC Directive provided a platform for the Multilateral Guarantee Agreement, which today applies not only in the European Union (and the European Economic Area) but also in Andorra, Croatia and Switzerland.
Under this Agreement, the "territory in which the vehicle is normally based" always means "the territory of the State of which the vehicle bears a registration plate". This is important because, for the Multilateral Guarantee Agreement to apply, a vehicle must be normally based in the country of a signatory bureau. As the name indicates, this Agreement applies multilaterally among the signatory countries.
The Multilateral Guarantee Agreement was signed on 15 March 1991 and applied to accidents that had occurred after 1 June 1991. The principles of this Agreement continue to apply today in the new agreement, the Internal Regulations (Règlement Général), which entered into force on 1 July 2003.
The Internal Regulations
The Internal Regulations (French: Règlement Général), which were adopted at the 2002 General Assembly of the Council of Bureaux (CoB), entered into force on 1 July 2003. The Internal Regulations replace the London Agreement and the Multilateral Guarantee Agreement, and provide a single document governing the reciprocal relations between National Bureaux of Insurance. The principles of the former agreement continue to apply in the agreement now in force.
The Agreement between Bureaux on the Protection of Visitors (EU/EEA) which the National Bureau of Insurance (NBI) has concluded since 1 February 2003 with all EEA member states and Croatia have been another milestone in terms of improving the protection of victims of road accidents. Under these agreements, persons (visitors) who are victims of an accident while abroad can pursue their claims against the foreign motor insurer through the latters representative in their own country of residence. The representative will settle the claims in accordance with the law of the country in which the accident occurred and as instructed by the foreign insurer.