Opinion ID: 1452732
Heading Depth: 2
Heading Rank: 1

Heading: History and Overview of CUAFRA

Text: In 1954, the National Conference of Commissioners on Uniform State Laws and the American Bar Association approved a Uniform Aircraft Financial Responsibility Act (UAFRA). As the commissioners explain in a preface to UAFRA, the model act is not a compulsory insurance law, since the requirement of insurance or security does not go into effect until an accident occurs and there is no provision for compulsory insurance or security thereafter, but was intended, rather, as an incentive to aircraft owners and operators to provide for their financial responsibility by taking out liability insurance or otherwise before they operate. (12 West's U. Laws Ann. (1996) U. Aircraft Financial Responsibility Act, Prefatory Note, p. 23.) UAFRA was based, in concept, on existing motor vehicle financial responsibility laws. The commissioners noted that in most states such laws had proven effective, in that withdrawal of the privilege of further operation of a motor vehicle until security is given has been sufficient to result in insurance being taken in most instances.... ( Ibid. ) California adopted its version of UAFRA in 1968. While departing from the model act in certain ways, the Legislature retained the central concept of using a requirement for postaccident proof of ability to respond in damages as an incentive to owners and operators to obtain and maintain liability insurance. CUAFRA requires, first, that the owner or operator of a noncommercial aircraft report to the department [2] any accident that resulted in death, personal injury or damage to nonowned property in excess of $400. (§§ 24243, subd. (d), 24300; cf. UAFRA, § 3.) Upon receipt of a report, the department is to determine the amount of security [within specified limits] which it deems sufficient to satisfy any judgment for damages resulting from the accident which may be recovered against each owner or operator.... (§ 24325; cf. UAFRA, § 4, subd. (a).) The owner or operator must then deposit security in the specified amount, to be used in payment of any judgment or settlement against the owner or operator on a claim arising from the accident. (§§ 24326, 24357, 24358.) Under section 24402, it is a misdemeanor for the owner or operator to operate an aircraft or allow an owned aircraft to operate without having complied with the postaccident security requirements. [3] Section 24327 sets out several circumstances under which the security requirements do not apply. Among these are that the owner or operator had in effect at the time of the accident an aircraft liability policy or bond with respect to the aircraft or its operation. (§ 24327, subds. (d), (e); cf. UAFRA, § 4, subd. (c).) [4] Section 24350, in turn, sets out the requirements for an insurance policy to be effective under Article 2 [the security provisions, including section 24327]. (Cf. UAFRA, § 5.) These requirements include specified minimum coverage limits for death, bodily injury and property damage, [i]f the accident results in such death, injury or damage. (§ 24350, subds. (b), (c).) [5] Although section 24326 requires deposit of security or proof of applicable insurance only after an accident, an owner or operator may take action before any accident to prevent imposition of a security requirement. Under section 24243, subdivision (f), CUAFRA as a whole, with the exception of the reporting requirement, does not apply to any person who has filed with the department, and maintained in force, a certificate of insurance evidencing a policy meeting the requirements of Section 24350. Finally, section 24361, the section primarily at issue in this case, provides: No insurance policy meeting the requirements of Section 24350 shall be canceled unless 30 days' prior notice is given to the department by either the insured or the insurance company. Section 24361, unlike many of CUAFRA's principal provisions, has no parallel in UAFRA.