Proposal for a Regulation of the European Parliament and of the Council on insurance requirements for air carriers and aircraft operators
Date: 2002-09-24
Institutions: European Commission
Subjects: air transport, aircraft, carrier, insurance, insured risk, intra-EU transport, liability

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Proposal

for a Regulation of

the European Parliament and of

the Council on insurance

requirements for air carriers and aircraft operators

(2003/C 20 E/17)

COM(2002) 521 final — 2002/0234(COD)

(Submitted by the Commission on 24 September 2002)

EXPLANATORY MEMORANDUM

Background

1. The Commission adopted on 10 October 2001 a Communication concerning the repercussions of the
terrorist attacks in the United States on the air transport industry (1). With regard to the specific
problem of insurance, it recognised that the terrorist attacks have exposed the vulnerability of the air
transport sector with damage exceeding all rational estimates. As insurers withdrew a few days after
the events cover for actions of war and terrorism, the question if air carriers operating in the
Community had sufficient cover became a serious concern.

2. In this Communication, the Commission undertook to examine the revision of the amounts and
conditions of insurance required for the issuance of operating licences in order to ensure a harmonised
approach. Also, it considered that Member States should verify whether third country air carriers
produce proof of minimum risk cover on the basis of the European Civil Aviation Conference (ECAC)
recommendations in absence of a Community rule. It undertook to examine the issue of insurance
coverage provided by third country air carriers flying into and within the Community, in order to
maintain equal conditions of competition with third country airlines and to avoid diverging responses
by Member States. In the absence of such cover, Member States would be obliged to take appropriate,
coordinated action,
i.e. to withdraw traffic rights and prohibit overflight in accordance with the
Community's international obligations.

3. In a second Communication adopted on 2 July 2002 on insurance in the Air Transport sector
following the terrorist attacks of 11 September 2001 in the United States (2), the Commission
concluded that it would continue monitoring the developments of the aviation insurance market
with regard to the revision of the amounts and conditions of insurance required for the issuance
of operating licences. In that respect, it was recognised that ‘should the Commission consider that it is
appropriate to further address the issues, [. . .] it will examine whether any legislative proposals are
necessary and appropriate’.

4. The Commission considers it necessary that a legal

the
conditions of
insurance and minimum amounts that both Community and third country air
carriers and aircraft operators have to observe at all times in respect to their liability vis-à-vis
passengers, baggage, cargo, mail and third parties. This framework should provide for
legal
certainty vis-à-vis Community and non-Community air carriers and aircraft operators flying into or
within the Community as well as to ensure the transparent, non-discriminatory and harmonised
application of minimum insurance requirements.

framework be established setting out

(1) COM(2001) 574 final of 10.10.2001.
(2) COM(2002) 320 final of 2.7.2002.

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5. Currently, Community rules in the field of air carrier licensing (3) merely require that air carriers ‘be
insured to cover liability in case of accidents, in particular in respect of passengers, luggage, cargo,
mail and third parties’, without, however, setting any criteria, conditions or amounts to be observed by
the licensing authorities of Member States. At the same time, the Community, considering that it is
important to ensure a proper level of compensation for passengers involved in accidents, decided on
5 April 2001 to conclude and ratify (4) the Montreal Convention on the Unification of Certain Rules
for International Carriage by Air, replacing the Warsaw Convention of 1929 relating to the same
subject and to modify the Community rules on air carrier liability (5).

6. As far as insurance to cover third party liability is concerned, there is currently no Community rule
setting limits for such liability, the only obligations for compensation derive from public international
law i.e. the Rome Convention of 1933 on the Unification of Certain Rules Relating to Damage Caused
by Foreign Aircraft to Third Parties on the Surface, as firstly amended in 1952 and later by a Protocol
signed in Montreal on 23 September 1978. This Convention has led the European Civil Aviation
Conference to undertake further work on the subject with a view to adjusting the levels for minimum
insurance requirements for air carriers operating into and within ECAC countries (6). Their work has
resulted in December 2000 in a Resolution (ECAC/25-1) which provides for minimum insurance
levels to cover liability vis-à-vis passengers as well as third parties.

7. Examination of the above-mentioned legal instruments indicates that they provide for a reasonable
system, which could form the basis for the proposed Community rules. Particular attention should be
paid to the structure of the insurance levels covering third party liability. Moreover, given the crisis
that has been caused by the events of 11 September 2001, the proposed rules should provide for a
regular monitoring of developments in the insurance market, so as to review the minimum
requirements and adjust them in due course.

Elements of the proposal

(a) The scope of application

8. The rules are designed to apply to all air carriers, including Community and third country, as well as
to aircraft operators not disposing of an operating licence. Equally, they should apply to state aircraft.
The Commission considers that the insurance requirements should cover all damage, including acci-
dental caused of damage, as well as damage caused by war or terrorist acts.

9. It

is also considered necessary for all

to the rules, namely scheduled and
non-scheduled, commercial and non-commercial to ensure a harmonised approach with regard to
third party liability.

flights to subject

10. Given that damage may be caused not only where an aircraft lands at or takes-off from a Community
airport, but also during the flight over the territory of a Member State, the Regulation is applicable to
flights into and out of Community airports and to overflight of Community territory.

(3) Council Regulation (EEC) No 2407/92 of 23 July 1992 (OJ L 240, 24.8.1992, p. 1).
(4) Council Decision of 5 April 2001 on the ratification of the Montreal Convention (OJ L 194, 18.7.2001).
(5) Council Regulation (EEC) 2027/97 on air carrier liability (OJ L 285, 17.10.1997, p. 1).
(6) The following 38 States are members of ECAC: Albania, Armenia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia,
Spain, Sweden, Switzerland, The former Yugoslav Republic of Macedonia, Turkey, Ukraine and the United Kingdom.

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11. In order to ensure a maximum of compatibility with existing air transport rules and in particular the
3rd Package legislation on market access and air carrier licensing, the Community rights and obli-
gations resulting from the Montreal Convention and the regulation amending the Community rules on
air carrier liability, but also with work undertaken to date by ECAC, the terminology used in the
proposed Regulation follows these instruments.

(b) The principles of insurance

12. The proposed Regulation aims at establishing a clear link between what the insurance for passengers,
baggage, cargo, mail and third parties should cover and their liability. As far as passenger, baggage,
mail and cargo liability are concerned, insurance should cover liability as this has been defined in the
following instruments:

1. The 1999 Montreal Convention applicable to Community air carriers and air carriers from third
countries which have ratified and apply this Convention; the 1929 Warsaw Convention which
continues to exist alongside the Montreal Convention for an indefinite period, applicable to air
carriers from third countries which are bound by that Convention. It should be noted that neither
Convention limits liability of air carriers.

2. Council Regulation 2027/97 on air carrier

liability as recently amended by the European
Parliament and Council Regulation (EC) No 889/2002 of 13 May 2002 (7) applicable to
Community air carriers;

In the light of the events that took place on 11 September 2001 and the developments on the
insurance regarding
insurance market
passenger, baggage, cargo and mail liability shall also cover acts of war and/or terrorism.

is considered necessary to clearly state that

thereafter,

it

13. As far as third party liability is concerned, there are no Community rules defining what such liability
should be based on. At international level, the 1933 Rome Convention on Damage Caused by Foreign
Aircraft
introduces minimum
insurance amounts for third party liability which follows the principle of strict liability for damage
sustained on the ground. The Convention excludes from the scope of its application nuclear damage
as well as damage caused by acts of war (armed conflicts) and terrorism.

to Third Parties on the Surface as amended in 1952 and 1978,

14. This Convention is not applicable in all Member States as not all are signatories to this Convention or
have not ratified it (8). To date, generally Member States provide that air carrier's liability vis-à-vis third
parties is based on proven tort arising from negligence or any other wrongful acts (wilful misconduct),
as opposed to strict liability. However, some Member States have followed the principle of strict
liability as introduced by the Rome Convention — France, Sweden and the United Kingdom provide
for unlimited third party liability, while Germany has limited liability to certain levels.

15. The Commission is of the opinion that there are no sufficient grounds demonstrating the need for the
introduction of strict liability of air carriers vis-à-vis third parties for risks linked to war and terrorist
acts. As far as third party liability of air carriers and aircraft operators in case of incidents is
concerned, the Commission is of the opinion that liability has been already sufficiently defined in
the Member States.

(7) OJ L 140, 30.5.2002, p. 2.
(8) By July 2002 the following Member States have signed the Convention: Belgium, Denmark, France, Greece, Italy,
Luxembourg, The Netherlands, Portugal, Spain and the United Kingdom. Only Belgium, Italy, Luxembourg and Spain
have ratified the Convention.

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In the light of the above, at this stage, it is considered necessary to provide for minimum insurance
requirements to cover third party liability for damage sustained on the ground and in the air caused
accidentally or by acts of war and/or terrorism by providing for a single combined limit. This
requirement should ensure that air carriers would now have the obligation to buy such cover on
the market or elsewhere as opposed to what was very often the case before the events of 11 September
2001.

16. As not all air carriers and aircraft operators flying into and within the Community may be in a
position to observe the financial fitness requirements that are laid down in the Community rules
relating to the issuance of operating licences (9), it is important to allow for some flexibility so that
other instruments such as state or bank guarantees are accepted in lieu of insurance policies.

(c) Monitoring and sanctions

17. However, such flexibility calls for increased monitoring obligations for Member States to ensure that
air carriers licensed in the Community and elsewhere are capable of providing adequate cover for
liability to cover any damage to passengers, baggage, cargo mail and third parties. Therefore, it is
proposed that Member States have the obligation to ensure that insurance requirements are met at all
times by performing regular inspections and where they have reasonable ground for doubting the
existence of insurance, that they require additional evidence from air carriers and aircraft operators.
Should such cover not exist air carriers should not be allowed either to take-off, if they have already
landed at a Community airport, or not to enter the airspace or to land.

18. This places a particular obligation on the Commission to ensure that the minimum requirements
reflect the situation in the market and to ensure that such requirements are adequate to provide
coverage for liability in case there is an increase in incidents in terms of accidents and war and
terrorist actions. Therefore, there should be a reporting obligation on the Commission on the devel-
opments in the insurance market taking into account any incidents which may significantly affect the
conditions of insurance and a review clause in the proposed rules to enable any necessary adjustments
of the required levels. Also, it should be taken into consideration that there might be considerable
changes at the level of international
law (possible future modification of the Rome Convention)
affecting third party liability.

19. In order to reflect possible changes and developments in the proposed rules, it is foreseen that such
decisions should be taken in accordance with the regulatory ‘comitology’ procedure provided for in
Article 5 of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the
exercise of implementing powers conferred to the Commission (10). In the context of the liberalisation
rules for air transport already contain provisions for such a commitee (article 11 of Council Regu-
lation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community
routes (OJ L 240 24.8.1992). Therefore, it is proposed to use this Committee for the revision of the
minimum insurance requirements.

(d) The minimum insurance requirements

20. There are clear provisions for each and every case of liability: passengers, baggage, cargo, mail and

third parties.

1. Passenger liability: minimum insurance requirement of 250 000 SDRs.

The minimum insurance requirements reflect the amounts currently applicable at ECAC level.

(9) See footnote 2.
(10) OJ L 184, 17.7.1999, p. 23.

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In line with the provisions of the 1999 Montreal Convention and Council Regulation (EEC)
No 2027/97 on air carrier liability, as amended by European Parliament and Council Regulation
(EC) No 889/2002 of 13 May 2002 (11), passenger liability is based on the notion of strict liability,
irrespective of
for claims up to
100 000 SDRs (Special Drawing Rights) as these are defined by the International Monetary Fund).

found on the account of

the air carrier concerned,

tort

Beyond that amount (up to the minimum requirement of 250 000 SDRs and above) insurance
vis-à-vis passengers and their baggage covers legal liability based on tort.

For air carriers bound by the 1929 Warsaw Convention, passenger liability is unlimited and based
on the presumption of liability on the part of the carrier for injury or death, subject to certain
defences, and concomitant limitation of liability, subject to certain exceptions (wilful misconduct).

2. Baggage: is dealt with under the same limits as passenger liability, with the proviso that baggage

was checked and in the charge of the air carrier and had not an inherent defect or vice.

3. Cargo liability minimum insurance 17 000 SDRs per ton (17 SDRs per kg).

This type of liability is covered by the Montreal Convention, which limits the liability of the air
carrier, inter alia in cases of acts of war or armed conflicts. The minimum insurance requirements
reflect the amounts currently provided in that Convention.

For air carriers bound by the Warsaw Convention, cargo is subject to liability is unlimited and
subject to certain exceptions (diligence during care, negligence and wilful misconduct).

to take account of

In order
the international environment within which Community and
non-Community carriers are currently operating, the present Regulation proposes to treat cargo
on the basis of legal liability.

4. Mail liability minimum insurance to be set by national administrations reflecting national laws for

the carriage of mail.

5. Third party liability minimum insurance according to aircraft type.

there are currently no harmonised requirements among Member States.
As explained earlier,
Currently,
indicate a sharp increase
compared to the levels provided in the Rome Convention (12) or those provided in the ECAC
resolution (13). The proposed minimum requirements reflect this situation.

the minimum insurance requirements for leased aircraft

The particularity of third party liability is that insurance requirements correspond to the Maximum
Take-Off Weight (MTOW) of aircraft specified in the certificate of airworthiness, which reflect the
potential danger that can be caused by each type of aircraft. Therefore, for reasons of consistency
with current insurance practice, it appears appropriate to undertake a clear classification of aircraft
to fit specific categories according to their MTOW. For ease of reference, a table summarising the
main types of aircraft used in civil aviation is presented in the annex.

(11) See footnote 6.
(12) Article 11 of the Rome Convention as modified by the Montreal Protocol of 1978 provides for:

a) For aircraft with MTOW < 2 000 kg: 300 000 SDRs.
b) For aircraft with MTOW < 6 000 kg: 300 000 SDRs plus 175 SDRs per kg.
c) For aircraft with MTOW > 6 000-30 000 kg: 1 000 000 SDRs plus 62,5 SDRs per kg for aircraft over

6 000-30 000 kg.

d) For aircraft with MTOW > 30 000 kg: 1 000 000 SDRs plus 65 SDRs per kg.
(13) The minimum insurance requirements provided by ECAC 25/1 are the following:

Category 1: Aircraft with MTOW < 2 000 kg: 1 500 000 SDRs.
Category 2: Aircraft with MTOW < 6 000 kg: 4 500 000 SDRs.
Category 3: Aircraft with MTOW < 25 000 kg: 12 500 000 SDRs.
Category 4: Aircraft with MTOW < 100 000 kg: 50 000 000 SDRs.
Category 5: Aircraft with MTOW > 100 000 kg: 90 000 000 SDRs.

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ANNEX

MAIN AIRCRAFT TYPES USED IN CIVIL AVIATION

Aircraft Mainfraim

Aircraft Type

Variant description

Maximum seats

Mtow (lb)

A.S.T.A. (GAF)

ATR

ATR

Aero Commander

Aerospatiale

Aerospatiale

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Airbus Industrie

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Antonov

Ayres Corporation

BAE SYSTEMS (Avro)

BAE SYSTEMS (Avro)

BAE SYSTEMS (BAC)

BAE SYSTEMS (BAC)

BAE SYSTEMS (BAC)

BAE SYSTEMS (BAC)

BAE SYSTEMS (HS)

NMAD

AT42

AT72

1121

CARV

N262

A300

A310

A318

A319

A320

A321

A330

A340

A380

A124

A140

A225

N22-24

100-500

100-500

A/B

10A-11R

A/B/C/D/E

B1-600 (GE)

200-320 (GE)

110 (CFM)-120 (P & W)

12-17

42-50

68-74

8

99-140

29

295-361

280

130

8 500

32 849-41 005

48 501

16 800-17 500

95 901-123 459

22 708-23 810

291 010-375 888

291 005-361 558

131 000

100-130 (CFM)/(IAE)

124-154

145 505-166 300

110 (CFM)/230 (IAE)

100/230 (IAE)

200-340 (GE)

210 (CFM)-640 (RR)

800 F(GP)/(RR)

100

180

220

405-440

361-185

555

52

145 505-166 449

181 198-196 211

467 379-507 000

566 587-804 686

1 208 000-1 285 000

864 200

42 218

1 322 750

AN10

A

84-130

112 436-121 475

AN12-22

AN24

AN26

AN30-32

RT/RV

B-D

B-P

AN38

100/200

AN70/72

P

AN74

AN8

LM20

AVRJ

AVRJ

BRIT

VANG

VC10

VISC

AGSY

T-200 D

LM200

RJ100-RJ70

RJ85/RJX100

100/252/310F

950

700/800

100/200

42-52

45-50

26

8

52

94-112

112

92-99

150

63-74

85-89

134 482-551 155

42 990-48 061

48 061-52 911

50 706-66 390

19 400

82 670-286 600

76 720-80 468

88 185

19 000

84 000-97 500

93 000-101 500

155 000-185 000

135 000-146 500

312 000-335 000

60 000-72 500

88 000-93 000

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Aircraft Mainfraim

Aircraft Type

Variant description

Maximum seats

Mtow (lb)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (HS)

BAE SYSTEMS (Jetstream)

BAE SYSTEMS (Jetstream)

BAE SYSTEMS (Jetstream)

BAE SYSTEMS (Jetstream)

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

Boeing

AGSY

AGSY

ATP

ATP

B146

COMT

TRID

J31

J31

J31

J41

B707

B717

B720

B727

B73N

B747

B747

B747

B747

B747

B747

B747

B747

B767

B767

B767

B767

B767

B767

B777

B777

C.1/E.1/T.2

Variant Unannounced

PAX/Freighter

Jetstream 61

100

1-4C

1C-3B

F (SCD)

Super

420

200ER

20

100QC 200C (M) Advanced

T-43A-BBJ2

100B/SR (P & W)

100B/SR (SUD) (P & W)

200B Combi (SUD) (RR)

200C (SCD) (P & W)

105 000

50 550-52 200

52 200

76 000-97 500

105 000-162 000

115 000-159 000

15 212

15 212

16 204

24 000

72

70

94-146

36-102

103-170

19

19

29

179-189

247 000-332 500

100

165

131-187

78-189

550

624

660

584

114 000-121 000

229 300

160 000-209 500

115 500-174 200

600 000-750 000

600 000

785 000-833 000

775 000-833 000

300 Combi 400D (P & W)

563/568

520 000-610 000-833 000

400F (RR)

SP (RR)

SR-100

200 EROPS (GE)

200ER (P & W)

200ERM (P & W)

300 (RR)

300ER (RR)

400ER (GE)

300 (RR)

300ER (GE)

331

490

290

255

290

309

309

375

833 000-875 000

630 000-696 000

520 000-733 600

345 000

282 000-387 000

320 000-345 000

345 000-350 000

387 000-407 000

400 000

440/550

515 000-660 000

390

380

750 000

444 000-580 000

Boeing (McDonnell-Douglas)

DC10

40I

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

DC8

DC8

DC8

20/51 (Stage 2 Hushkits)

176-189

276 000

30F (M)/54CF (Stage 3 Hushkits)

176-189

300 000-315 000

73CF

189-258

335 000-355 000

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Aircraft Mainfraim

Aircraft Type

Variant description

Maximum seats

Mtow (lb)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Boeing (McDonnell-Douglas)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

Bombardier (Canadair)

DC9

DC9

MD11

MD11

MD80

MD80

MD90

MD90

MD90

BCJT

CGXP

CGXP

CL44

CL60

CRJ7

CRJ9

CRJT

14-21 (Stage 3 Hushkits)

31-51 (Stage 3 Hushkits)

Freighter (P & W)

Passenger (RR)/ER (GE)

87

88

10

30/30T (SAIC)

40

ASTOR

J

604

200LR

Bombardier (Learjet)

LJ24/25/35/36

TF

Bombardier (Learjet)

LJ55/60

Learjet 60

Bombardier (Shorts)

Bombardier (Shorts)

Bombardier (de Havilland)

Bombardier (de Havilland)

Bombardier (de Havilland)

Bombardier (de Havilland)

Bombardier (de Havilland)

Bombardier (de Havilland)

CASA

Century Aerospace

Cessna

Cessna

Cessna

Chichester Miles

Dassault Aviation

Dassault Aviation

Dassault Aviation

S330

S360

DHC5

DHC6

DHC7

DHC8

DHC8

DHC8

C295

CENT

C525

200

Advanced

A

300 Vista Liner

150

200

320C/400

8M

1

C670/750

CEXL/CIT2

551

LPRD

2000/DA50

DA90

DA90

B

EX

109

127-139

405

139

172

139

172

217

10

19

5

85 700-100 000

98 000-122 200

602 500-625 500

618 000-630 500

125 000-149 500

149 500-160 000

139 000

156 000

163 500

37 500

93 500

93 500

178-214

205 000-210 000

19

70

86

50

6-8

8

30

39

41-44

19-20

59

40

56-80

78

5

7

9/10

8-10

4

12-19

19

45 100-47 600

72 750

80 500

47 450-53 000

12 499-18 000

19 500-22 750

22 900

26 453-27 100

41 000

11 579-12 500

43 500-47 000

33 000-36 300

41 100-63 750

34 500

46 297

7 000

10 600

22 450-35 700

12 500-18 700

2 550-4 000

35 000-40 780

45 500

45 000-48 300

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Aircraft Mainfraim

Aircraft Type

Variant description

Maximum seats

Mtow (lb)

Dassault Aviation

MERC

Embraer

Embraer

Embraer

Embraer

Embraer

Embraer

Embraer

Embraer

Embraer

Fairchild

Fairchild (Swearingen)

Fairchild/Dornier

Fairchild/Dornier

Fairchild/Dornier

Fairchild/Dornier

Fairchild/Dornier

Fairchild/Dornier

Fokker

Fokker

Fokker

Fokker

Fokker

Fokker

Fokker

E110

E120

E120

E135

E140

E145

E170

E190

E190

FH27

MTRO

D328

D328

D428

D728

D928

DJET

FK10

FK27

FK28

FK28

FK28

FK50

FK70

General Dynamics (Convair)

C600/640

General Dynamics (Convair)

General Dynamics (Convair)

Gulfstream Aerospace

Gulfstream Aerospace

Gulfstream Aerospace

Handley Page

Ilyushin

Ilyushin

Ilyushin

Ilyushin

C880

C990

GLF1

GLF1

GLF4

HRLD

I114

IL18

IL18

IL18

100

P2

ER

ER Advanced

100

200

D (LCD)

Merlin IVC

100

100

600RF

1000

4000

6000

Commuter

Freighter

100

B/D

D Freighter

E/V

179

9-22

30

37

0

50

70

98

110

40-52

14-20

33

33

44

70

34

122

48-60

70

85

79

68

79

52-56

110

121

24-38

19

48-60

60

124 560

9 921-15 432

26 437

41 887-48 943

46 517

42 328-48 500

78 153

106 922

106 922

36 225-45 500

12 500-17 000

27 558-30 847

43 650

79 343-83 753

109 568

33 510

95 000

40 500-45 000

63 000-71 000

71 000-73 000

70 800

42 990-45 900

81 000-84 000

45 000-55 000

184 500-193 000

246 200-253 000

36 000

36 000

73 200-90 500

40 000-45 000

50 045

111-122

135 584-141 096

122

141 096

134 923

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Aircraft Mainfraim

Aircraft Type

Variant description

Maximum seats

Mtow (lb)

Ilyushin

Ilyushin

Ilyushin

Ilyushin

Indonesian Aerospace

IL18

IL62

IL86

IL96

N250

V Freighter

300

Israel Aircraft Industries

1125/ARVA

186

350

300

54-68

4-30

134 923

357 148-368 172

458 650

476 198

48 501-54 674

23 500-40 780

Lockheed

Lockheed

Lockheed

Lockheed

Raytheon

Raytheon

Raytheon

Saab

Tupolev

Tupolev

Tupolev

Tupolev

Tupolev

Tupolev

Tupolev

Tupolev

WSK-PZL Mielec

Xian

Yakovlev

Source: AIRCLAIMS Database (May 2002).

1011

1329

HERC

L188

1300/1900/
BE99/B400

HRZN

PREM

S200-340

T104

T114

T124

T134

T144

T154

T204

T234

AN28

YUN7

1 (Group 1)/Freighter

315-400

430 000-510 000

6/6A

L-100

A

T-1A Jayhawk

AWACS

Prototype

100

120F (RR)

120 (BMW RR)

B1T/R-M28 Skytruck (P & W)

200

10

99

7-19

13

8

37-58

50-100

220

56-68

72-84

40 921-44 500

155 000

113 000-127 500

12 500-16 950

36 000

12 500

28 000-50 265

154 325-167 550

268 800-413 917

83 776

98 106-108 026

330 693-396 832

167-180

198 416-220 462

214

166

17

52

209 555-244 155

87 082-186 950

14 330

46 295-52 911

YK40/42

D-100 (Yak-142)

34-168

30 203-145 505

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Whereas:

Having regard to the Treaty establishing the European
Community, and in particular Article 80 (2) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social
Committee,

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

(1) In the framework of the common transport policy, it is
important to ensure a proper minimum level of insurance
to cover liability of air carriers concerned by accidents in
particular in respect of passengers, baggage, cargo, mail
and third parties;

(2) In the Community aviation market,

the distinction
between national and international air
transport has
been eliminated and it is, therefore, appropriate to have
the
insurance
requirements for Community air carriers;

same minimum level and nature of

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(3) Common action is necessary to ensure that minimum
levels of insurance also apply to air carriers from third
countries so that
to ensure a level playing field with
Community air carriers and foster consumer protection;

carriers and other air carriers flying to and from an
airport situated in the Community as well as flying over
the territory of a Member State;

its

in order

insurance

required for

(4) The Commission has stated in its Communication of
10 October 2001 regarding the repercussions of
the
terrorist attacks in the United States on the air transport
intention to examine the amounts and
industry,
conditions of
issue of
the
operating licences
to ensure a harmonised
approach; also, the Commission stated in its Communi-
cation of 2 July 2002 regarding insurance in the Air
Transport
attacks of
11 September 2001 in the United States, that it would
continue monitoring the developments on the aviation
the
insurance market with regard to the revision of
amounts and conditions of
insurance required for the
issuance of operating licences;

following the

terrorist

sector

(10) It is necessary to require air carriers to provide evidence
on request that they respect at all times the minimum
insurance requirements to cover liability as provided for
in the present Regulation;

(11) The minimum insurance requirements should be reviewed

after a period of time;

(12) Procedures

the

for monitoring

the
minimum insurance requirements should be transparent
and non-discriminatory and should not impede in any
way the free movement of goods, persons, services and
capital;

application of

(5) The Community has concluded the Montreal Convention
for the Unification of Certain Rules Relating to Inter-
national Carriage by Air agreed on 28 May 1999 (1)
setting new global rules on liability in the event of
transport of persons,
accidents
baggage and cargo replacing those in the Warsaw
Convention of 1929 and its subsequent amendments;

international air

for

(6) Article 50 of the Montreal Convention requires parties to
ensure that air carriers are adequately insured to cover
liability under
that Convention; whereas the Warsaw
Convention of 1929 and its subsequent amendments
will continue to exist alongside the Montreal convention
for an indefinite period; whereas both Conventions
foresee the possibility of unlimited liability;

(7) Article 7 of Council Regulation (EEC) 2407/92 of 23 July
1992 on licensing of air carriers, requires air carriers to
in
be insured to cover liability in case of accidents,
particular in respect of passengers, baggage, cargo, mail
and third parties, albeit without specifying minimum
amounts and conditions of insurance;

(13) Since any measures necessary for the implementation of
this Regulation with regard to the adjustment of
the
minimum insurance requirements are of a general scope
and they concern the adaptation of certain non-essential
the Regulation within the meaning of
provisions of
Article 2 of Council Decision 1999/468/EC of 28 June
1999 laying down the procedures for the exercise of
implementing powers conferred to the Commission (2),
they should be adopted by use of
regulatory
procedure provided for in Article 5 of that Decision;

the

(14) The Regulation is in accordance with the principles of
subsidiarity and proportionality as set out in Article 5
of the Treaty. The introduction of minimum insurance
requirements can contribute to the objectives of
the
internal aviation market by eliminating distortions of
competition. The objectives
can therefore be more
effectively achieved by the Community by means of
harmonised rules. The Regulation confines itself to the
minimum required in order to achieve these objectives
and does not go beyond what
is necessary for that
purpose.

HAVE ADOPTED THIS REGULATION:

(8) It is appropriate to take into account that the European
Civil Aviation Conference has adopted on 13 December
2000 a Resolution (ECAC/25-1) on minimum levels of
insurance cover for passenger and third party liability;

(9) It

is necessary to define non-discriminatory minimum
insurance requirements
to cover passenger, baggage,
cargo, mail and third parties for both Community air

Article 1

Objective

this Regulation is
in respect of

to define minimum
The objective of
insurance regarding
insurance requirements
passengers, baggage, mail, cargo and third parties,
that air
carriers and aircraft operators have to respect to be allowed
to operate services within, into or out of the Community or to
fly over the territory of Member States to which the Treaty
applies.

(1) OJ L 194, 18.07.2001, p. 38.

(2) OJ L 184, 17.7.1999, p. 23.

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Article 2

Scope

This Regulation shall apply

(a) to all air carriers flying to or from an airport situated in the
Community as well as flying over the territory of a Member
State operating a scheduled or non-scheduled flight;

(b) to all aircraft operators flying to or from an airport situated
in the Community as well as flying over the territory of a
Member State carrying passengers and their baggage, mail
and/or cargo without remuneration or hire;

(c) to carriage by air of passengers and their baggage, mail or
cargo performed by a state aircraft of a Member State or
any other country.

(d)

(e)

person residing outside the Community or a legal person
established outside the Community using one or more
aircraft in accordance with the regulations of the country
of residence or establishment;

‘insurer’ shall mean an undertaking, which has received
official authorisation in accordance with Article 6 of
Council Directive 73/239/EEC (2), or
a non-member-
country undertaking, which would require authorisation
in accordance with Article 6 of Directive 73/239/EEC or
Article 6 of Directive 79/267/EEC if it had its registered
office in the Community;

insured perils,

‘insurance’
setting the
shall mean the policy contract
conditions whereby the insurer agrees to indemnify the
insured for all insured loss up to the limit of liability for
all
incidents which occur
during the policy period;
insurance shall also mean the
policy contract where the insured perils are acts of war,
terrorism, hijacking, act of sabotage, unlawful seizure of
aircraft, civil commotion or labour disturbances;

in respect of

This Regulation shall not apply to carriage by air of passengers,
mail and/or cargo, performed by non-power driven aircraft
and/or ultra-light power driven aircraft, nor to local flights
not involving carriage between different airports.
In respect
of
law concerning insurance
requirements in the event of accidents shall apply.

these operations, national

(f)

shall mean the
‘insurer's principal place of business’
location of the insurer's headquarters or, alternatively, the
place from which the majority of
the undertaking's
operations are managed on a day to day basis;

Article 3

Definitions

For the purposes of this Regulation:

(a)

‘air carrier’ shall mean an air transport undertaking with a
valid operating licence;

(g)

‘incident’ shall mean the occurrence or series of occur-
rences having the same origin,
in which an aircraft
causes damage to passengers, baggage, cargo, mail and/or
third parties on the surface and/or in the air. Where an
incident consists of a series of occurrences,
it shall be
treated as having occurred on the date of the first such
occurrence.
Incidents shall be understood to cause acci-
cargo, mail
dentally damage
and/or third parties on the surface and/or in the air, or
because of acts of war,
terrorism, hijacking, act of
sabotage, unlawful seizure of aircraft, civil commotion or
labour disturbances;

to passengers, baggage,

(b) ‘Community air carrier’ shall mean an air carrier with a
valid operating licence granted by a Member State in
accordance with the provisions of Council Regulation
(EEC) 2407/92 of 23 July 1992 of licensing of air carriers;

(h) ‘flight’ shall mean the beginning of

the operations of
departure until the end of the operations of arrival and
where the aircraft has come to a complete stop;

(c)

‘aircraft operator’ shall mean a natural person residing in a
Member State or a legal person established in a Member
State using one or more aircraft in accordance with the
regulations applicable in that Member State, as provided for
in Council Regulation (EEC) No 3922/91 (1), or a natural

(1) Council Regulation (EEC) No 3922/91 of 16 December 1991 on
the harmonisation of
technical requirements and administrative
procedures in the field of civil aviation (OJ L 373, 31.12.1991,
p. 4-8).

(i)

‘air service’ shall mean a flight or a series of flights carrying
passengers, cargo, and/or mail irrespective of remuneration
and/or hire;

(j)

‘scheduling period’ shall mean either the summer or the
winter season as used in the schedules of air carriers;

(2) OJ L 228, 16.8.1973, p. 3.

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(k)

‘SDR’ shall mean a Special Drawing Right as defined by the
International Monetary Fund in 1969, as an international
to supplement members' existing reserve
reserve asset,
assets (official holdings of gold,
foreign exchange, and
reserve positions in the International Monetary Fund) (1);

(l)

‘MTOW’ shall mean the Maximum Take Off Weight, which
corresponds to a certified amount specific to all aircraft
types as stated in the certificate of airworthiness of the
aircraft.

Article 4

Principles of insurance

as well

operators

operating

Community air carriers registered in the Community and
the
aircraft
in
Community,
and aircraft
operators operating air services into the Community and/or
flying over Community territory, shall be insured in respect
to their liability for damage sustained on the territory of a
Member State and for which a right to compensation exists.

aircraft
air

registered

as other

carriers

Article 5

Compliance

1.
The insurance shall be effected by an insurer authorised
to effect such insurance under Community law or the laws of:

— the country which has delivered an operating licence to the

air carrier concerned, or

— the country where the aircraft is registered, or

— the country where the insurer has its residence or principal

place of business.

This paragraph shall not affect the rights of Member States to
define the prudential conditions under which an insurer
non-authorised according to Article 6 of Council Directive
73/239/EEC may conduct business in its territory.

Air carriers and aircraft operators registered in a third
2.
country,
insurance
alternatively
requirements referred to in paragraph 1, any of the following
securities:

provide

shall

the

to

— A guarantee issued by a bank authorised to do so by the
country of registration of the aircraft and whose financial
responsibility has been verified by that country;

— A guarantee issued by a bank authorised to do so by the
country of registration of
that country
undertakes that it will not claim immunity from suit in
respect of that guarantee.

the aircraft,

if

Air carriers and aircraft operators

3.
shall deposit an
insurance certificate issued in accordance with paragraph 1
or any of the securities provided for in paragraph 2 with the
the
competent authorities of Member State(s) concerned at
beginning of each scheduling period.

the present paragraph,
For the purpose of application of
Member State concerned shall mean the Member State(s)
which has issued an operating licence to an air carrier or the
Member State where an aircraft has been registered and the
Member State responsible for the airport to and from an air
service is operated.

Member States overflown may also require that air carriers and
aircraft operators produce evidence that insurance has been
effected in accordance with the present Regulation.

4. Where an air service consists of series of flights, all air
the
carriers or
requirements stipulated in the present Regulation.

concerned shall meet

aircraft operators

5. Where the insurance or the guarantee or the security
expires during a flight, air carriers shall ensure that it shall
continue to be in force until the next safe landing of the
aircraft specified in the flight plan.

Article 6

Passenger, baggage, mail and cargo liability

1. Where passengers are carried by air, all air carriers shall
be insured to cover their liability for death, wounding or any
other bodily injury sustained by a passenger for the minimum
amount of 250 000 SDRs per passenger. Such insurance shall
be understood to also cover damage sustained in the case of
destruction or loss of, or damage to checked baggage of a
passenger, upon condition only that
the event causing the
damage took place in the period during which the checked
baggage was in the charge of the carrier, or its servants or
agents.

— A cash deposit in a depository maintained in the country
having granted a valid operating licence to the air carrier
concerned, or having delivered the air operator's certificate
to the aircraft operator concerned;

(1) SDRs are determined daily by the International Monetary Fund. The
SDR rate on 5 September 2002 was set at: SDR/Euro 0,747385 —
Euro/SDR 1,338000.

This provision shall apply mutatis mutandis to aircraft operators.

In case of aircraft operated under short

term lease
2.
agreements with or without
crew minimum insurance
requirements have to be met by the air carrier actually
performing the flight.

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3. Where cargo is carried by air, air carriers and aircraft
operators shall be insured to cover their liability for damage
sustained in the event of the destruction or loss of, or damage
to cargo carried for the minimum amount of 17 SDRs per
kilogram upon condition that the event, which caused the
damage so sustained, took place during the flight.

Category 4: aircraft with a MTOW > 200 000 kg: 600 million
SDRs

This provision shall apply mutatis mutandis to aircraft operators,
where the aircraft is registered in the Community.

4. Where mail is carried by air Member States shall set the
minimum insurance requirements in value for the carriage of
mail by air carriers and/or aircraft operators without discrimi-
nation on grounds of nationality or identity of the air carrier or
the aircraft operator.

3.
Air carriers operating flights to and from any airport
situated on the territory of a Member State or flying over
the territory of a Member State shall produce evidence that
they observe at all times the minimum insurance requirements
referred to in paragraph 2.

The values referred to in this Article may be amended as
law
in accordance with

5.
appropriate including where changes
indicate the necessity of such decision,
the procedure laid down in Article 9 (2).

in international

Article 7

Third Party Liability

1.
Insurance to cover liability vis-à-vis third parties shall be
understood to cover any damage caused by an aircraft in flight
or on the ground or by any person or thing falling therefrom
to third parties,
for each aircraft and incident, only if the
damage is a direct consequence of the incident giving rise
thereto, and

a)

for which the air carrier or aircraft operator concerned is
held liable according to national laws of the Member State
where the incident has occurred, or

civil

b) was due to an act of war, or hijacking, or sabotage, or
terrorism, or
social disturbance
commotion or
intended to affect the operation of the aircraft and was
due to the negligence or other wrongful act or omission
of the air carrier or its servants or agents or the aircraft
operator.

This provision shall apply mutatis mutandis to aircraft operators,
where the aircraft is registered in a third country.

2.
All air carriers shall be insured for damages sustained by
third parties in the event of accidents as well as acts of war and
acts of terrorism. The minimum insurance requirements shall
be understood to cover the following categories of aircraft:

Category 1: aircraft with a MTOW < 25 000 kg: 80 million
SDRs

Category 2: aircraft with a MTOW < 50 000 kg: 270 million
SDRs

Category 3: aircraft with a MTOW < 200 000 kg: 400 million
SDRs

This provision shall apply mutatis mutandis
operators.

to all aircraft

In case of aircraft operated under short

term lease
4.
agreement with or without
crew, minimum insurance
requirements have to be met by the air carrier bearing the
operating risk of the flight.

The values referred to in this Article may be amended as
law
in accordance with

5.
appropriate including where changes
indicate the necessity of such decision,
the procedure laid down in Article 9 (2).

in international

Article 8

Enforcement

1. Member States shall perform regular inspections to verify
that air carriers using airports in their territory, or Community
air carriers to which they have delivered an operating licence,
or aircraft operators to which they have issued an aircraft
operator's certificate according to Council Regulation (EEC)
No 2407/92 comply with the provisions of the present Regu-
lation.

This provision shall apply mutatis mutandis to aircraft operators
whichever the place of registration of the aircraft.

2. Where appropriate Member States concerned may request
additional evidence from the air carrier, the aircraft operator or
the insurer concerned.

3. Where Member States concerned are not satisfied that the
conditions of the present Regulation are met, they shall refuse
the air carrier or aircraft operator access to routes into or
within the Community or the right to overfly their territory.

4. Where Member States concerned are not satisfied that the
conditions of the present Regulation are met after an aircraft
has landed at an airport in their territory, they shall not allow
the aircraft to take-off, before the air carrier or aircraft operator
concerned has produced a valid insurance certificate according
to the present Regulation.

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Article 9

Committee

Article 10

Report and cooperation

The Commission shall be assisted by the committee

1.
instituted by Article 11 of Regulation (EEC) No 2408/92.

2. Where reference is made to decisions taken pursuant to
paragraph 1, the regulatory procedure laid down in Article 5 of
Decision 1999/468/EC shall apply, in compliance with Article
7 and Article 8 thereof.

1.
The Commission shall submit a report to the European
Parliament and the Council on the operation of this Regulation
at least three years after its entry into force. The report shall
address in particular the functioning of articles 5, 6, 7 and 8.

2. Member States shall upon request submit information on
the application of this Regulation to the Commission.

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be three months.

The

committee

4.
to in this Article may
furthermore be consulted by the Commission on any other
matter concerning the application of this Regulation.

referred

Article 11

Entry into force

This Regulation shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

This Regulation shall be binding in its entirety and directly
applicable in all Member States.