Aviation Insurance: Issues Related to the Reauthorization of FAA's Aviation Insurance Program
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1997-05-01
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TRIS Online Accession Number:00738013
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NTL Classification:NTL-AVIATION-Aviation Economics and Finance;NTL-LAWS AND REGULATIONS-Federal Laws;
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Abstract:This Congressional testimony by Gerald L. Dillingham, Associate Director,
Transportation Issues, Resources, Community, and Economic Development Division,
General Accounting Office (GAO) discusses changes made to the Federal Aviation
Administration's (FAA) Aviation Insurance Program. The program provides
insurance coverage for aircraft operations that are deemed essential to the
foreign policy interests of the United States when commercial insurance is
unavailable on reasonable terms due to war or other hostilities. In 1994, the
GAO found the program had insufficient funds available to pay potential
insurance claims in the unlikely event of a catastrophic loss. In his testimony,
Mr. Dillingham noted the National Defense Authorization Act for Fiscal Year 1997
made funds available to indemnify the program for losses incurred under
DOD-sponsored flights, which account for the majority of flights insured.
However, the GAO found gaps remained in the program's ability to pay claims for
non-Defense flights. Secondly, some uncertainty about the program continues to
be caused by ambiguity in the statutory language and FAA's current implementing
regulations about whether the President must make a determination that a flight
is in the foreign policy interests of the United States before issuing insurance.
16p.
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