50/02
28 May 2002
AVIATION INSURANCE SCHEME EXTENDED FOR A FURTHER MONTH
The Government backed Troika aviation insurance scheme is to be extended from 31 May until 30 June.
In recognition of the improving availability of commercial cover for third party war and terrorism risks, and the undesirability of government schemes acting in competition with the market, the terms of Troika will change:
- The level at which the Troika scheme starts to provide cover for airlines will rise from $50m to $150m;
- Premiums for airline cover between $150m to $1bn will rise from $0.35c to $.50c per passenger.
The changes will come in to effect on 7 June.
The Government's aim remains to withdraw completely from the aviation insurance market. Should another terrorist incident lead to a lack of third party insurance, such that the UK aviation industry was unable to operate, the Government's intention would be to intervene as it did after September 11th. This could be through re-activating the Troika scheme.
The Government hopes this clarification of its long-term view will assist all parties in negotiating for the full return to the commercial market.