It is explained here:
https://www.gov.uk/government/news/hiring-a-vehicle
It is ever since they abolished the paper counterpart to a photo driving licence.
Motability dealers don’t usually request it – mostly it is hire car companies both in UK and in Europe that want to see it. I printed one off for my USA trip recently and they didn’t even look at it!
I presume if they are asking for one, that Volvo treat their courtesy cars like hire cars and want to know what motoring convictions/penalty points you have/have not.
It shouldn’t really be needed as your Motability insurance covers courtesy cars loaned to you whilst your Motability car is with them, as opposed to using the Volvo dealers own ‘courtesy car’ insurance.
Dave