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1. Each Member State shall set up or authorise a body entrusted with the task of providing compensation to injured parties resident within its territory, at least up to the limits of the insurance obligation, for damage to property or personal injuries caused by a vehicle insured by an insurance undertaking, from the moment when:

(a) the insurance undertaking is subject to bankruptcy proceedings; or (b) the insurance undertaking is subject to winding-up proceedings as defined in Article 268(1), point (d), of Directive 2009/138/EC.

2. Each Member State shall take appropriate measures to ensure that the body referred to in paragraph 1 has sufficient funds available to compensate injured parties in accordance with the rules set out in paragraph 10 when compensation payments are due in situations provided for in paragraph 1, points (a) and (b). Those measures may include requirements to make financial contributions, provided that they are only imposed on insurance undertakings that have been authorised by the Member State imposing them.

3. Without prejudice to any obligation under Article 280 of Directive 2009/138/EC, each Member State shall ensure that, whenever an order is made or a decision is taken by a competent court or any other competent authority to commence the proceedings referred to in paragraph 1, point (a) or (b), in respect of an insurance undertaking of which that Member State is the home Member State, that order or decision is made public. The body referred to in paragraph 1 established in the home Member State of the insurance undertaking shall ensure that all the bodies referred to in paragraph 1 in all Member States are promptly informed about that order or decision.

4. The injured party may present a claim directly to the body referred to in paragraph 1.

5. Upon receipt of the claim, the body referred to in paragraph 1 shall inform the equivalent body in the home Member State of the insurance undertaking and the insurance undertaking subject to bankruptcy or winding-up proceedings, or its administrator or liquidator, as defined in Article 268(1), points (e) and (f), of Directive 2009/138/EC, respectively, that it has received a claim from the injured party.

6. The insurance undertaking subject to bankruptcy or winding-up proceedings, or its administrator or liquidator, shall inform the body referred to in paragraph 1 when it compensates or denies liability with regard to a claim that has also been received by the body referred to in paragraph 1.

7. Member States shall ensure that the body referred to in paragraph 1, on the basis, inter alia, of information provided at its request by the injured party, provides the injured party with a reasoned offer of compensation or a reasoned reply as provided for in the second subparagraph of this paragraph, in accordance with the applicable national law, within three months from the date when the injured party presented his or her claim for compensation to the body. For the purposes of the first subparagraph, the body shall:

(a) make a reasoned offer of compensation, where it has established that it is liable to provide compensation pursuant to paragraph 1, point (a) or (b), the claim is not contested and the damages have been partially or fully quantified;

(b) provide a reasoned reply to the points made in the claim, where it has established that it is not liable to provide compensation pursuant to paragraph 1, point (a) or (b), or where liability is denied or has not been clearly determined or the damages have not been fully quantified.

8. Where compensation is due in accordance with the second subparagraph, point (a), of paragraph 7, the body referred to in paragraph 1 shall pay the compensation to the injured party without undue delay and in any event within three months of the acceptance by the injured party of the reasoned offer of compensation referred to in the second subparagraph, point (a), of paragraph 7. Where the damage has been only partially quantified, the requirements concerning the payment of the compensation set out in the first subparagraph shall apply in respect of that partially quantified damage, and from the moment of acceptance of the corresponding reasoned offer of compensation.

9. Member States shall ensure that the body referred to in paragraph 1 has all the necessary powers and competences to be able to cooperate in due time with other such bodies in other Member States, with bodies set up or authorised under Article 25a in all Member States and with other interested parties, including an insurance undertaking subject to bankruptcy or winding-up proceedings, its administrator or liquidator, and the national competent authorities of the Member States, at all stages during the proceedings referred to in this Article. Such cooperation shall include requesting, receiving and providing information, including on the details of specific claims, where relevant.

10. Where the home Member State of the insurance undertaking referred to in paragraph 1 is different from the Member State in which the injured party is resident, the body referred to in paragraph 1 in the Member State in which the injured party is resident which has compensated the injured party in accordance with paragraph 8 shall be entitled to claim full reimbursement of the sum paid by way of compensation from the body referred to in paragraph 1 in the home Member State of the insurance undertaking. The body referred to in paragraph 1 in the home Member State of the insurance undertaking shall make the payment to the body referred to in paragraph 1 in the Member State in which the injured party is resident which has compensated the injured party in accordance with paragraph 8 in a reasonable time not exceeding six months, unless otherwise agreed in writing by those bodies, after it has received a claim for such reimbursement.

The body that has provided compensation pursuant to the first subparagraph shall be subrogated to the injured party in his or her rights against the person who caused the accident or his or her insurance undertaking, except against the policyholder or other insured person who caused the accident in so far as the liability of the policyholder or of the insured person would be covered by the insolvent insurance undertaking in accordance with the applicable national law. Each Member State shall be obliged to acknowledge this subrogation as provided for by any other Member State.

11. Paragraphs 1 to 10 shall be without prejudice to the right of Member States to:

(a) regard compensation paid by the body referred to in paragraph 1 as subsidiary or non-subsidiary;

(b) make provision for the settlement of claims in respect of the same accident between:

(i) the body referred to in paragraph 1;

(ii) the person or persons responsible for the accident;

(iii) other insurance undertakings or social security bodies required to compensate the injured party.

12. Member States shall not allow the body referred to in paragraph 1 to make the payment of compensation subject to any requirements other than those laid down in this Directive. In particular, Member States shall not allow the body referred to in paragraph 1 to make the payment of compensation subject to the requirement that the injured party establishes that the legal or natural person liable is unable, or refuses, to pay.

13. The bodies referred to in paragraph 1 or the entities referred to in the second subparagraph of this paragraph shall strive to conclude an agreement by 23 December 2023 to implement this Article, concerning their functions and obligations and the procedures for reimbursement pursuant to this Article. For that purpose, by 23 June 2023 each Member State shall:

(a) set up or authorise the body referred to in paragraph 1 and empower it to negotiate and conclude such an agreement; or (b) designate an entity and empower it to negotiate and conclude such an agreement, to which the body referred to in paragraph 1 will become a party when it is set up or authorised.

The agreement referred to in the first subparagraph shall be immediately notified to the Commission. Where the agreement referred to in the first subparagraph is not concluded by 23 December 2023, the Commission is empowered to adopt delegated acts in accordance with the procedure referred to in Article 28b in order to specify the procedural tasks and the procedural obligations of the bodies referred to in paragraph 1 with regard to reimbursement.