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PR(01)18: The Authority examines measures adopted by EFTA States to provide insurance coverage for third-party damage due to acts of war and terrorism

18.9.2002

In the aftermath of the events of 11 September 2001, insurance companies cancelled existing insurance policies covering third-party damage connected to acts of war and terrorism, and offered reinstatement of insurance coverage subject to a reduced ceiling and increased premium. These new conditions came into effect on 24 September 2001.

Given that at that time, supplementary insurance coverage was not available on the market, and further given that airline companies warned that without the necessary insurance coverage all commercial air traffic would cease, Governments within the EEA intervened in order to provide insurance coverage exceeding the limits set by commercial insurance undertakings.

Against this background, the EU Council of finance ministers (ECOFIN), at an informal meeting on 22 September 2001, established a ‘code of conduct’ laying down certain criteria which must be satisfied when EC Member States provide liability cover to airlines facing insurance problems. Furthermore, EC Member States were reminded of their obligation to notify the EC Commission of any such measures.

Following up on the EC Commission’s investigation regarding measures adopted by EC Member States to provide insurance coverage for third-party damage due to acts of war and terrorism, the EFTA Surveillance Authority is currently examining similar measures adopted by EFTA States.

At present, the Norwegian Government has already notified the Authority of the adoption of such measures, a notification from the Icelandic Government is expected in the next few days.

 With the aim of avoiding any discrimination within the EEA, the Authority will assess the measures notified to it in respect of aid to the air transport sector on the basis of the same criteria as those which are or are to be applied in the European Community.

In a more general manner, the Authority will discuss these and other possible emergency measures with EFTA States at a multilateral meeting on 19 October 2001.

For further information, please contact Mr. Utne (tel.: 02 286 18 50) or Mrs. Antoniadis (tel.: 02 286 18 52).

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