The European Commission yesterday confirmed it has sent a letter of formal notice to Ireland for not having fully transposed the insolvency provisions of the Motor Insurance Directive, which it was required to do by 23 December 2023.

The missing transposition affects the protection of injured parties after an accident in the case of the insolvency of an insurance undertaking.

Directive (EU) 2021/2118, amending Directive 2009/103/EC, seeks to strengthen the protection of victims of traffic accidents across the EU.

To that end, it clarifies the scope of that protection, facilitates checks on compulsory motor insurance and sets up a mechanism to compensate victims in case of insolvency of the responsible insurer.

It also facilitates switching between insurers for policyholders by ensuring equal and non-discriminatory treatment of claims history statements.

Ireland has two months to respond to the letter of formal notice and address the shortcomings raised in it. If its response is not satisfactory, the Commission may decide to issue a reasoned opinion.