5. INSURANCE IN THE AVIATION SECTOR
(23813)
12423/02
COM(02)521
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Draft Regulation of the European Parliament and of the Council on insurance requirements for air carriers and aircraft operators.
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| Legal base: | Article 80(2) EC; co-decision; qualified majority voting
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| Document originated: | 24 September 2002
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| Deposited in Parliament: |
4 October 2002 |
| Department: | Transport
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| Basis of consideration: |
EM of 21 October 2002 |
| Previous Committee Report:
| None |
| To be discussed in Council:
| Not known |
| Committee's assessment: | Legally and politically important
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| Committee's decision: | Not cleared; further information requested
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Background
5.1 In the wake of the terrorist attacks of 11 September
2001 the Commission has had to consider a number of insurance
issues in relation to the aviation industry. The Commission has
now concluded that a regulation is necessary to introduce minimum
levels of liability insurance relating to passengers, third parties,
baggage, mail and cargo.
The document
5.2 The draft Regulation would apply to almost all flights
to or from Community airports or the territory of a Member State
and includes flights performed by state aircraft. All aircraft
operations, with the exception of flights out and back from the
same airport, would be subject to the Regulation. Non-power-driven
aircraft and/or ultra-light power-driven aircraft would be excluded.
Member States would be required to carry out regular inspections
of both Community and non-Community aircraft to ensure the requirements
of the Regulation were complied with. Member States would be required
also to refuse access to routes into or within the Community or
the right to overfly their territory where the requirements of
the Regulation were not met.
5.3 The minimum levels set in the document exceed significantly
those applied by the Civil Aviation Authority (CAA) for UK-based
operating licence holders and those applied for the purpose of
flights to and from the UK from non-Community states.
The Government's view
5.4 The Minister for Transport, Department for Transport
(Mr John Spellar) highlighted a number of issues to us, saying:
"The Regulation as drafted would extend significantly
the number of UK aircraft operators obliged to have passenger
and third party liability insurance. At present the CAA requirements,
for instance, apply only to air carriers holding an operating
licence in accordance with Council Regulation 2407/92. This, together
with the proposed requirement for Member States to perform regular
verification inspections, will impose a significant administrative
burden on the CAA.
"The Regulation introduces a requirement to ensure overflying
aircraft are adequately insured. In accordance with the 1944 Air
Services Transit Agreement the UK has entered into bilateral agreements
with other countries establishing the terms on which we allow
aircraft to overfly UK territory. It is for consideration whether
we should allow this matter to be resolved, if other parties to
the Agreement are willing, at Community level or maintain the
same type of regime of separate bilateral agreements.
"The Regulation also introduces an obligation for Member
States to establish minimum insurance requirements in relation
to the carriage of mail.
"The proposed Regulation would oblige carriers and operators
to obtain insurance covering each and every incident, which, in
the case of third-party war risk, is not currently available from
the commercial market. The proposal is therefore linked to the
issue of whether the UK should support the establishment of and
provide guarantees to an international mutual insurance scheme.[8]
"The Government will wish to consider the scope of the proposed
Regulation; the categories and levels of third party cover suggested;
and the practicalities of implementation and enforcement."
5.5 The Minister also tells us that there may be a subsidiarity
issue in relation to the 1944 International Air Services Transit
Agreement concerning the rights of overflying aircraft.
Conclusion
5.6 The Department for Transport is calling for
views on the proposed Regulation from organisations representing
the airlines, the general aviation industry, insurers and private
aircraft operators and from the CAA. There will also be a Regulatory
Impact Assessment (RIA), partly informed by the consultation.
The views of the stakeholders and the result of the RIA are essential
to consideration of this document.
5.7 We do not propose to clear the document now. Before
considering it again we should like to hear further from the Minister
on the overall desirability of the proposal as it develops and
on the issues relating to subsidiarity and the international mutual
insurance scheme, and to have the RIA and a note on the outcome
of the consultation.
8 We
considered this proposal on 16 October 2002, see (23650) 10798/02;
HC 152-xxxviii (2001-02), paragraph 26. Back
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