Provision of Aviation Insurance Coverage for Commercial Air Carrier Service in Domestic and International Operations

President Obama approved continued federal aviation insurance coverage for U.S. commercial air carriers through September 30, 2013, with delegated authority to the Secretary of Transportation to extend through December 31, 2013 if private insurance remains unavailable on reasonable terms. This continues a long-standing program under 49 U.S.C. chapter 443 that provides government-backed insurance when commercial markets cannot.

Federal Register Open PDF 77 FR 60035

Impact dates

Dec 31, 2013
Maximum extension date delegated to Secretary of Transportation
Sep 30, 2013
Insurance/reinsurance approval expires unless extended

Key directives

Determine continuation of U.S. air transportation necessary for air commerce, national security, and foreign policy
Approve provision of insurance/reinsurance to U.S.-certificated air carriers until September 30, 2013
Delegate authority to Secretary of Transportation to extend approval to December 31, 2013
Direct Secretary to notify all air carriers immediately
Arrange for Federal Register publication

Who is ordered

Secretary of Transportation · Department of Transportation

Timeline

Immediate

Notification to all air carriers required
Federal Register publication required

Near term (90d)

Insurance coverage active through September 30, 2013

Long term

Potential extension to December 31, 2013 if Secretary determines necessary

Risks & tensions

Program continuation assumes private insurance market remains unable to provide coverage on 'reasonable terms' — criterion creates subjective determination risk
Delegation to Secretary of Transportation for extension reduces presidential visibility for second-phase decision
Short 15-month horizon (with potential 3-month extension) suggests temporary stopgap rather than structural reform