Implementation of the EC’s Fifth Directive

The Financial Services and Markets Act 2000 (Motor Insurance) Regulations 2007, SI 2007 No 2403 partially implement the EC’s Fifth Motor Insurance Directive with effect from 5 September 2007. The measure is concerned with a vehicle which is purchased as new in one member state within the European Economic Area and then exported to another member state for use in the latter. Under the compulsory insurance rules, the vehicle has to be insured in the state of origin. Before the passing of the Regulations, the law applicable to the policy would be the presumed to be the law of the place of registration, that place being the place in which the risk was situated. However, the effect of the Regulations is that if the vehicle is exported within 30 days, the place of the situation of the risk is the place to which the vehicle has been exported, so applicable law is based upon that law and not the law of the state of origin.