Article 13 (13) of the SII defines a ‘Member State in which the risk is situated’ as any of the following: (a) the Member State in which the property is situated, where the insurance relates either to buildings or to buildings and their contents, in so far as the contents are covered by the same insurance policy; (b) the Member State of registration, where the insurance relates to vehicles of any type; (c) the Member State where the policy holder took out the policy in the case of policies of a duration of four months or less covering travel or holiday risks, whatever the class concerned; (d)in all cases not explicitly covered by points (a), (b) or (c), the Member State in which either of the following is situated: (i) the habitual residence of the policy holder; or (ii) if the policy holder is a legal person, that policy holder’s establishment to which the contract relates; In this respect, we would like to seek clarification as to the understanding of “the Member State where the policy holder took out the policy”, particularly in relation to car hire excess insurance products. Is the Member State where the policy holder took out the policy, deemed to be interpreted as: a) the Member State where the policyholder purchases the policy; or b) the Member State in which the car will actually be used when rented; or c) is it the Member State where the insurance undertaking issuing the policy has its head office? If we take the example of a Spanish national who rents a car to be used in Italy and purchases a car hire excess insurance policy for the duration of four months or less from an insurance undertaking which has its head office in Malta. The policy is purchased online through an insurance agent website, which is also authorised in Malta. Would the Member State in which the risk is situated be Spain, Italy or Malta? We would also understand that this definition is important in order to ascertain whether: a) passporting is required in cases where the policies are of a duration of four months or less; and b) if so to determine where passporting should take place. Nevertheless, the agent and the undertaking would still need to obtain passporting rights in relation to the annual policies.

Background of the question

To give you some background, our request for interpretation is in the case of an insurance intermediary which is authorised in a Member State to act as an insurance agent for an insurance undertaking which is also authorised and regulated in the same Member State as the intermediary is situated. The agent specialises in the distribution of car hire excess insurance products which are sold either as an annual policy or as a single trip policy which would provide a maximum of 120 days (4 months) coverage. The products are sold via the agent’s website, through affiliated websites redirecting customers to the agent’s website and through aggregator partner websites. It can also be sold through other intermediaries established across the EU with whom the agent has a Terms of Business Arrangement (TOBA)