2.—(1) In section 145 of the Road Traffic Act 1988(1) (requirements in respect of policies of insurance) in subsection (3) after paragraph (a) there shall be inserted the following paragraph—

(aa)must, in the case of a vehicle normally based in the territory of another member State, insure him or them in respect of any civil liability which may be incurred by him or them as a result of an event related to the use of the vehicle in Great Britain if,—

(i)according to the law of that territory, he or they would be required to be insured in respect of a civil liability which would arise under that law as a result of that event if the place where the vehicle was used when the event occurred were in that territory, and

(ii)the cover required by that law would be higher than that required by paragraph (a) above, and.

(2) In paragraph (b) of subsection (3) of that section (which requires a policy to provide insurance in respect of certain liabilities in accordance with the law on compulsory motor insurance of the State where the liability may be incurred) after the word “must” there shall be inserted “, in the case of a vehicle normally based in Great Britain,” and for the words from “the law” to the end of the paragraph there shall be substituted—

(i)the law on compulsory insurance against civil liability in respect of the use of vehicles of the State in whose territory the event giving rise to the liability occurred; or

(ii)if it would give higher cover, the law which would be applicable under this Part of this Act if the place where the vehicle was used when that event occurred were in Great Britain; and.

(3) After subsection (4) of that section there shall be inserted the following subsection—

(4A) In the case of a person—

(a)carried in or upon a vehicle, or

(b)entering or getting on to, or alighting from, a vehicle,

the provisions of paragraph (a) of subsection (4) above do not apply unless cover in respect of the liability referred to in that paragraph is in fact provided pursuant to a requirement of the Employers' Liability (Compulsory Insurance) Act 1969(2).