Insurers could be fined up to £500,000 if they fail to submit policy details to the Motor Insurance Database (MID) by 20 January 2003.

Members of the Motor Insurers' Information Centre (MIIC) said the information was required to comply with the fourth EU Motor Directive.

The MIIC said the legislation, which is yet to be published, would state that documenting the information would be a legal obligation.

MIIC business programme manager Penny Coombs said time was running out.

MIIC programme manager Donald Martin said the Directive would "help identify relevant insurers quickly, put claimants in touch with claims representatives and improve claims handling for all EU citizens abroad".

Road Runner group chairman Mike Slack said most people were "organised and ready".

But he said he could not see the benefit of the database as "there has never been a problem in the fleet and motor trade with uninsured drivers".

Martin said the database was launched in September 2001 and that phase one dealt with individual vehicle insurance.

"We put 25 million vehicles on the database," he said.

Martin added that phase two concerned fleet policyholders and four million more vehicles needed to be added to the database.

He said this was "much more of a challenge," because the information was "not traditionally held by insurers".

MIIC's Raymond Ellis said the database was the motor industry's response to the problem of uninsured drivers. He said this basis purposed remained core in phase two.