PART 198--AVIATION INSURANCE Sec. 198.1 Eligibility of aircraft for insurance. 198.3 Basis of insurance. 198.5 Types of insurance coverage available. 198.7 Amount of insurance coverage available. 198.9 Application for insurance. 198.11 Change in status of aircraft. 198.13 Premium insurance--payment of premiums. 198.15 Nonpremium insurance--payment of registration fees. Appendix A to Part 198--Form of Application named in Sec. 198.9 Authority: 49 U.S.C. 1531 through 1542; (49 U.S.C. 106(g)) (Revised Pub. L. 97-449, Jan. 12, 1983); and 49 CFR 1.47(b). Source: Docket No. 24223, 50 FR 51336, Dec. 16, 1985, unless otherwise noted. Sec. 198.1 Eligibility of aircraft for insurance. An aircraft operation is eligible for insurance if: (a) The President of the United States has determined that the continuation of that aircraft operation is necessary to carry out the foreign policy of the United States, (b) The aircraft operation is in foreign air commerce or between two or more points all of which are outside the United States; and (c) The Administrator finds that commercial insurance against loss or damage arising out of any risk from the aircraft operation cannot be obtained on reasonable terms and conditions from any company authorized to engage in an insurance business in a State of the United States. Sec. 198.3 Basis of insurance. (a) Application for insurance with premium may be made if the eligibility criteria in Sec. 198.1 are met. Premiums charged for insurance shall be based, insofar as practicable, upon consideration of the risk involved. (b) Applications for insurance without premium may be made if the eligibility criteria in Sec. 198.1 are met and air services are to be performed under contract to a Federal agency which has agreed to indemnify the Administrator, acting for the Secretary of Transportation, against all losses covered by such insurance. Sec. 198.5 Types of insurance coverage available. Application may be made for insurance against loss or damage with respect to the following persons, property, or interests: (a) Aircraft engaged in operations which are eligible for insurance, as defined in Sec. 198.1; (b) Any person employed or transported on the aircraft referred to in paragraph (a); (c) The baggage of persons referred to in paragraph (b); (d) Cargoes transported or to be transported on the aircraft referred to in paragraph (a); (e) Any other liability of the aircraft referred to in paragraph (a) or of its owner or operator of the nature customarily covered by insurance. Sec. 198.7 Amount of insurance coverage available. (a) For each aircraft the amount insured may not exceed the amount by which the applicant has otherwise insured or self-insured the aircraft or itself against damage or liability arising from any risk. In the case of hull insurance, the amount insured shall not exceed the fair and reasonable value of the aircraft. (b) Policies issued without premium may be revised from time to time, by agreement of the Federal Aviation Administrator and the insured and with the approval of the Federal agency on whose behalf contract air services are to be performed, to add aircraft or contracts or to amend amounts of coverage if the insured has changed the amount by which it has otherwise insured or self- insured the aircraft or itself. Sec. 198.9 Application for insurance. (a) Application for premium or nonpremium insurance shall be made in accordance with the applicable form set forth in Appendix A of this part. Application for hull and liability insurance shall be filed on the same form. (b) Each applicant for insurance with premium under this part also shall submit to the FAA with its application a letter describing in detail the operations in which the aircraft is or will be engaged and stating the type of insurance coverage being sought and the reason it is being sought. Sec. 198.11 Change in status of aircraft. In the event of sale, lease, confiscation, requisition, total loss, or any other change in the status of an aircraft covered by insurance under this part, notice shall be given to the Administrator within 10 working days after the change in status. Sec. 198.13 Premium insurance--payment of premiums. The premium for insurance issued under this part shall be paid within 10 days after receipt, by the insured, of notice that premium payment is due. Premiums shall be sent to the Federal Aviation Administrator by check made payable to the Federal Aviation Administration. Sec. 198.15 Nonpremium insurance--payment of registration fees. (a) The registration fee for each aircraft to be covered by nonpremium insurance shall be $200. The fee shall cover the cost of hull and liability insurance. (b) An application for nonpremium insurance shall be accomplished by the proper fee, payable by check to the order of the Federal Aviation Administration. Registration fees are not returnable unless applications are rejected. (c) Requests made after issuance of a nonpremium policy for the addition of aircraft shall be accompanied by the registration fee for each aircraft. Appendix A to Part 198--Form of Application Named in Sec. 198.9 United States of America Department of Transportation Federal Aviation Administration Application for Aviation Insurance Application is made for aviation insurance, pursuant to Title XIII of the Federal Aviation Act of 1958, as amended, and in accordance with all provisions of law and subject to all limitations thereof, on the aircraft described in the attached "Schedule of Aircraft," with the understanding that this application does not commit the Government to any liability or make the applicant liable for any premium or fees unless insurance is effected by the Federal Aviation Administrator. Name of Applicant------------------------------------------------------------ Address---------------------------------------------------------------------- ----------------------------------------------------------------------------- Basis of Insurance ( ) Insurance with premium ( ) Insurance without premium: Contracting Federal Agency--------------------------------------------------- Date and Number of Contract-------------------------------------------------- Hull Amounts set forth in the attached "Schedule of Aircraft" as representing the amount of hull insurance desired for each such aircraft shall not exceed the amount in effect on the date of this application, by which the applicant has insured or self-insured that aircraft. Liability, Exclusive of Cargo The type and amounts of coverage required for the aircraft described in the attached "Schedule of Aircraft" shall be indicated and the limits of liability for each such coverage shall be specified in the schedule, but such limits shall not exceed the corresponding amounts in effect on the date of this application by which the applicant has insured or self-insured against liability. Liability of Cargo Limits of liability desired for each of the aircraft described in the attached "Schedule of Aircraft" shall be specified. General Insurance shall attach no earlier than the commercial insurance terminates or at such time as may be specified in the policy. If application is for insurance with premium, the rate of premium and the amount of any deductible shall be fixed by the Federal Aviation Administrator, acting for the Secretary of Transportation. The registration fee for insurance without premium is $200 per aircraft listed on the "Schedule of Aircraft" and is not returnable unless application is rejected. Registration fees are due upon application or revision of the "Schedule of Aircraft" adding aircraft and are payable by check to the Federal Aviation Administration. The application shall be accompanied by copies of any commercial insurance policy and any company plan of self-insurance applicable to the aircraft listed in the "Schedule of Aircraft." The "Schedule of Aircraft" attached to policies without premium may be revised from time to time by agreement of the Federal Aviation Administrator and the insured and with the approval of the Federal agency on whose behalf contract air services are to be performed, to add aircraft or to add contracts. The application also shall be accompanied by a statement which shall be considered to be incorporated in the application and to form a part thereof, and which shall be signed by the same corporate official who signs the application on behalf of the applicant. The statement shall show that the applicant: (a) Controls and operates the aircraft listed in the attached "Schedule of Aircraft," and if application is for insurance without premium, has committed such aircraft to the above indicated contract(s); (b) Is maintaining and has maintained during the 6-month period preceding this application (or since the aircraft was acquired if acquired during the 6-month period) insurance, including demonstrable self-insurance, covering possible injury, loss or damage in amounts which equal or exceed the insurance coverages requested in the application; and (c) Cannot obtain insurance of the type requested on reasonable terms and conditions from companies authorized to engage in an insurance business in a State of the United States or the District of Columbia, or has partial commercial insurance coverage, but is unable to obtain the additional needed insurance of the type requested on reasonable terms and conditions from such commercial sources; Verification shall include evidence of premium rate history, the names of the commercial insurance carriers which have been contacted and the premium rates quoted by such carriers which applicant considers not reasonable, and any conditions or limitations which those carriers would impose or have imposed, such as evidence of cancellation or notice of cancellation, which would cause their insurance to be inapplicable to some or all of the operations by aircraft listed in the "Schedule of Aircraft." If the application is for insurance with respect to a foreign-flag aircraft, it shall be accompanied by the statement setting forth the registration number(s) of the aircraft, the nationality of registration, and the name of the owner or lessee. The insurance applied for hereunder shall not cover risks to persons or property engaged or transported exclusively in operations between two points in the United States as defined in section 101(41) of the Federal Aviation Act of 1958, as amended (49 U.S.C. 1301 (41)). Applicant warrants that the particulars herein are true and complete to the best of his or her knowledge and that no information has been withheld or suppressed. Applicant agrees that this application, including all attachments hereto and all revisions of the "Schedule of Aircraft" hereinafter accepted by the Government and the terms and conditions of the form of policy prescribed by the Federal Aviation Administrator, acting for the Secretary of Transportation, will constitute the basis of any contract between him or her and the United States of America. Applicant-------------------------------------------------------------------- By--------------------------------------------------------------------------- ----------------------------------------------------------------------------- (Name and Title) Date ____________ Schedule of Aircraft Hull Insurance Amount for which each aircraft Make, model, Amount of is and hull currently configuration FAA insurance insured (passenger, identification desired (including cargo, or No. or for each self- Loss convertible) equivalent aircraft insurance) payee Liability Insurance (Exclusive of cargo) Amount of insurance (including self- Amount insurance) requested in effect per per occurrence occurrence Liability to cargo Amount of insurance (including self- insurance) in effect Amount per requested occurrence