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PR(02)10: The EFTA Surveillance Authority authorises the prolongation of governmental “war insurance” in support of air carriers and airports in Iceland and Norway


In a decision taken on 31 May 2002, the EFTA Surveillance Authority decided not to raise objections to the prolongation of ‘war insurance’ schemes in Iceland and Norway covering the period between 24 October 2001 and 31 May 2002.

Given that the commercial insurance market did not return to normal after the first month following the terrorist attacks of 11 September 2001, the Norwegian and the Icelandic Governments decided on various occasions to prolong the Governmental ‘war insurance’ schemes until 31 May 2002.

In assessing the compatibility of these measures, the Authority applied Article 61 (2)(b) of the EEA Agreement (which allows for the possibility to grant “aid to make good the damage caused by …exceptional occurrences”).

In this respect, the Authority took account of the EC Commission guidelines, which were adopted on 23 October 2001 after discussions with representatives from EC Member States within the ad hoc insurance group. These guidelines lay down minimum criteria as regards the premium payments for airlines, cargo operators and airports, which were applied by the EC Commission in its assessment of ‘war insurance’ schemes in the EC Member States for the entire period from 25 October 2001 until 31 May 2002.

The Authority took also note of the conclusions from the EC Transport Council on 6 and 7 December 2001 which gave green light for a prolongation of Governmental ‘war insurance’ schemes within the EC until the end of March 2002 as well as the conclusions from the EC Transport Council of 25 and 26 March 2002 which took note of the EC Commission’s intention of continuing to authorise the aid notified to it by Member States on the existing terms and for the same period as that envisaged by the United States (i.e. until 31 May 2002).

Against this background, the Authority verified, in particular, that the Governmental ‘war insurance’ was limited to remedy the withdrawal of such insurance cover by the commercial insurance market and did not place air carriers in a position which was more favourable than before the events of 11 September 2001 and that the insured operators paid a premium in line with the Commission’s guidelines.

For further information, please contact Mr. Utne (tel.: 286.18.50) or Mrs. Antoniadis (tel.: 286.18.52).

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