[Code of Federal Regulations]

[Title 14, Volume 3]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 14CFR198.3]



[Page 313]

 

                     TITLE 14--AERONAUTICS AND SPACE

 

CHAPTER I--FEDERAL AVIATION ADMINISTRATION, DEPARTMENT OF TRANSPORTATION 

                               (CONTINUED)

 

PART 198_AVIATION INSURANCE--Table of Contents

 

Sec. 198.3  Basis of insurance.



    (a) Premium insurance may be issued by the FAA is the requirements 

of Sec. 198.19 (a), (b)(1) and (c) are met.

    (b) Subject to Sec. 198.9(c), standby insurance without premium may 

be issued by the FAA if all of the following conditions have been met:

    (1) A department, agency, or instrumentality of the U.S. Government 

seeks performance of air services operations, pursuant to a contract of 

the department, agency, or instrumentality; or transportation of 

military forces or materiel on behalf of the United States, pursuant to 

an agreement between the United States and a foreign government.

    (2) Such department, agency, or instrumentality 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 

determination that the continuation of that aircraft operation is 

necessary to carry out the foreign policy of the United States.

    (3) A current copy of the aircraft operator's applicable commercial 

insurance policy or policies is on file with the FAA, including every 

endorsement making a material change to the policy. Updated copies of 

these policies must be provided upon each renewal of the commercial 

policy. Every subsequent 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 occurs:

    (1) The requirements in Sec. 198.1 are no longer met; or

    (2) In the case of non-premium insurance, an aircraft operation is 

no longer performed under contract to a department, 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 commercial insurance can now be obtained on reasonable terms.

    (d) Insurance policies revert to standby 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.



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