NYTimes.com Article: Airline Companies Consider Creating Own Insurance Plan

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Airline Companies Consider Creating Own Insurance Plan

February 12, 2002

By THE ASSOCIATED PRESS




With the market for war liability insurance for airlines
all but dried up since Sept. 11, the nation's major
carriers are discussing the creation of their own insurance
company.

Working with an insurance unit of Marsh & McLennan
Companies (news/quote), the Air Transport Association, an
industry group based in Washington, has developed a
proposal that would provide airlines with as much as $1.5
billion in third-party war liability coverage. The
industry-run policy could go into effect as early as next
month.

"It is up to each individual carrier to decide if they
would want to participate," Jim Casey, a lawyer for the
trade group, said yesterday. Several major United States
airlines are reviewing the proposal, Mr. Casey said.

The Federal Aviation Administration has been providing this
type of coverage to the industry since Sept. 11, but that
policy will expire on March 20. The agency is considering a
one-year extension of the policy.

Since Sept. 11, commercial insurers have offered the
airline industry only about $50 million in coverage.

The industry proposal calls for the creation of an
insurance vehicle owned by the participants it would cover.
The entity under review would cover airlines for damage
caused on the ground domestically and internationally, Mr.
Casey said.

http://www.nytimes.com/2002/02/12/business/12INSU.html?ex=1014530361&ei=1&en=8773fad32941f11a



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