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913 

SUBCHAPTER N—WAR RISK INSURANCE 

PART 198—AVIATION INSURANCE 

Sec. 
198.1

Eligibility of aircraft operation for in-

surance. 

198.3

Basis of insurance. 

198.5

Types of insurance coverage available. 

198.7

Amount of insurance coverage avail-

able. 

198.9

Application for insurance. 

198.11

Change in status of aircraft. 

198.13

Premium insurance—payment of pre-

miums. 

198.15

Non-premium insurance—payment of 

registration binders. 

198.17

Ground support and other coverage. 

A

UTHORITY

: 49 U.S.C. 106(g), 40113, 44301– 

44310; 49 CFR 1.47(b). 

S

OURCE

: Docket No. 28893, 63 FR 13739, Mar. 

20, 1998, unless otherwise noted. 

§ 198.1 Eligibility of aircraft operation 

for insurance. 

An aircraft operation is eligible for 

insurance if— 

(a) The President of the United 

States has determined that the con-
tinuation of that aircraft operation is 
necessary to carry out the foreign pol-
icy of the United States; 

(b) The aircraft operation is— 
(1) In foreign air commerce or be-

tween two or more places all of which 
are outside the United States if insur-
ance with premium is sought; or 

(2) In domestic or foreign air com-

merce, or between two or more places 
all of which are outside the United 
States if insurance without premium is 
sought; and 

(c) The Administrator finds that 

commercial insurance against loss or 
damage arising out of any risk from 
the aircraft operation cannot be ob-
tained on reasonable terms from an in-
surance carrier. 

§ 198.3 Basis of insurance. 

(a) Premium insurance may be issued 

by the FAA is the requirements of 
§ 198.1 (a), (b)(1) and (c) are met. 

(b) Subject to § 198.9(c), standby in-

surance without premium may be 
issued by the FAA if all of the fol-
lowing conditions have been met: 

(1) A department, agency, or instru-

mentality of the U.S. Government 

seeks performance of air services oper-
ations, pursuant to a contract of the 
department, agency, or instrumen-
tality; or transportation of military 
forces or materiel on behalf of the 
United States, pursuant to an agree-
ment between the United States and a 
foreign government. 

(2) Such department, agency, or in-

strumentality of the U.S. Government 
has agreed in writing to indemnify the 
Secretary of Transportation against all 
losses covered by such insurance. Such 
an agreement, when countersigned by 
the President, constitutes a determina-
tion that the continuation of that air-
craft operation is necessary to carry 
out the foreign policy of the United 
States. 

(3) A current copy of the aircraft op-

erator’s applicable commercial insur-
ance policy or policies is on file with 
the FAA, including every endorsement 
making a material change to the pol-
icy. Updated copies of these policies 
must be provided upon each renewal of 
the commercial policy. Every subse-
quent material change by endorsement 
must be promptly provided to the FAA. 

(c) Insurance is activated, placing the 

insurance in full force, as specified by 
the FAA’s written notification to the 
operator and remains in force until 
such time as either of the following oc-
curs: 

(1) The requirements in § 198.1 are no 

longer met; or 

(2) In the case of non-premium insur-

ance, an aircraft operation is no longer 
performed under contract to a depart-
ment, agency, or instrumentality of 
the U.S. Government; or pursuant to 
an agreement between the United 
States and a foreign government; or 
the Administrator finds that commer-
cial insurance can now be obtained on 
reasonable terms. 

(d) Insurance policies revert to stand-

by status upon written notification by 
the FAA to the aircraft operator. A 
policy will remain in standby status 
until either— 

(1) The insurance is activated by 

written notice; or 

(2) The policy is canceled.