81/02
8 August 2002
AVIATION INSURANCE SCHEME EXTENDED UNTIL END OF SEPTEMBER
The Government's Troika insurance scheme, which insures UK aviation for third party war and terrorism risks, has been extended from 29 August to 30 September.
In line with the European Commission Communication of 9 July 2002, which stated that ?it would be desirable to align the premiums charged for providing government guarantees to the most attractive market offer?, a change will be made to the charging system for passenger airlines.
Passenger airlines are currently charged a premium of ¢50 for Troika cover from US$150 million to US$1 billion. From 30 August 2002 this will change to a tiered system of charging:
- airlines requiring cover from US$150 million to US$500 million will continue to pay a premium of ¢50 per passenger;
- airlines requiring cover above US$500 million up to a level of US$1 billion will be charged an additional premium of ¢20 per passenger.
This is in line with the Government's objective, which remains to withdraw from the aviation insurance market.
There will be no change in premiums, terms and conditions for cargo airlines, airports and service providers.
NOTES TO EDITORS:
1. The ?Troika? scheme was set up to ensure that UK airlines could continue to fly in the wake of the terrorist attacks on 11 September, and was due to expire at midnight on 29 August.
2. The brokers, Aon, Marsh and Willis, set up an insurance company - Troika - which provides insurance policies under the scheme to fill the gap in commercial cover. The policies are administered by Global Aerospace.
3. The airlines scheme covers airlines with a Civil Aviation UK operating license or transport licence. Service providers to the airline industry and airports are covered for their operations in the UK. By agreement with the Isle of Man, IOM airlines and service providers are also included on a risk-sharing basis.
4. Cover for service providers is provided by Troika at a commercially based premium following the example of the existing Pool Re scheme which provides insurance cover for terrorist attacks on buildings in Britain. The objective is that the insurance industry should provide insurance capacity at appropriate market rates as quickly as possible.
5. Media enquiries should be directed to, HM Treasury Press Office, tel 020 7270 5238.