Green Cards

The green card system was developed by the UN and dates back to 1949.The ‘green card’ is an international motor insurance certificate proving the holder has the cover needed to drive in other countries listed on the green card.

It finds its way into EU Law in the Motor Insurance Directives which paved the way for motorists to drive in the EEA and cross borders easily without having to obtain a physical green card, frontier insurance or undergo border checks. When we leave the EU this could all grind to a halt for British motorists. Insurers may have to issue green cards again and there may need to be physical checks of insurance at borders.

The UK Government is currently negotiating a Withdrawal Agreement with the EU, which is effectively the divorce settlement to leave the EU before trade negotiations can begin. This Withdrawal Agreement contains within it a proposal for an implementation period, also known as a transitional arrangement, which leaves the UK aligned to EU law until the end of December 2020. So, if agreement is reached on the UK’s exit from the EU, cross border motor insurance would remain the same, without the need for green cards, until the end of 2020.   

If the Withdrawal Agreement is not agreed and the UK were to exit the EU without a deal on 29 March 2019, as things currently stand, there are three potential scenarios for cross-border insurance arrangements post-Brexit:

1. Green card-free circulation remains in place. This, of course, is the most desirable outcome and one which MIB is lobbying hard for.
   
   The UK Government has indicated that after Brexit it intends to retain the framework and requirements in the Road Traffic Act for green card-free access whilst driving in the EEA. This could be the foundation for continuing the current system where no green cards are required to drive from the UK into the EAA and vice versa and there would be no border checks on insurance documents.
   
   However, it remains to be seen whether the EU will agree to this solution and in the meantime MIB and insurers need to plan for a scenario where green cards are required. 
   
   
2. Green cards are required for travel in the EU from 29 March 2019. Green cards would be checked at the border before vehicles are allowed to cross from the UK into the EAA and vice versa.
   
   As explained in a letter to MIB members (from Dominic Clayden, CEO, dated 5 October 2018) green cards provide a simple, low tech solution for insurance checks. A physical piece of green paper must be shown at borders before vehicles can enter – it cannot be checked electronically or shown on a smart phone. The green card itself must follow a format set by the UN and Council of Bureaux (CoB). This eventuality carries significant implications for both insurers and motorists.
   
   
3. Frontier insurance must be purchased at borders. If green cards are not valid or available, frontier insurance must be purchased at the border. Since, frontier insurance is not readily available in many EEA countries, this could be chaotic for all involved.

Whether or not physical green cards are needed, the operation of the system relies on MIB being the ultimate guarantor of claims and for that purpose, MIB is party to agreements with other bureaux across the Green Card System. To enable the green card free travel within the EEA, MIB is a signatory to a ‘multilateral agreement’ with all other EEA countries. We are working to ensure this agreement is still valid post Brexit, or if not, we will be looking to sign bilateral agreements with the other EEA countries. In case there is no transitional period, this work needs to be completed before 29 March 2019.

For insurers, in case the EU do not agree to allow the UK to be part of the green card-free circulation zone, it means they need to plan for having to issue large numbers of green cards by 29 March 2019. The Department for Transport (DfT) estimates that 2.5 million private vehicles travel to the EEA each year, along with 80,000-100,000 haulage vehicles.