§ Mr. CousinsTo ask the Secretary of State for Transport, Local Government and the Regions what UK Government-supported schemes exist and at what expense to offer terrorism and war risk cover in the aviation and shipping industries; and what representations he has made about extending such schemes. [37284]
§ Mr. JamiesonIn relation to the maritime sector, a scheme under the Marine and Aviation Insurance (War Risks) Act 1952 has been in place for many years by which the Secretary of State provides reinsurance in return for the payment of a premium which, during periods of low risk, is waived.
In relation to the aviation sector, the Government introduced a scheme in September 2001 to address the withdrawal of third party war risk and terrorism cover by the insurance industry in the light of the terrorist attacks in America. In accordance with guidelines adopted by the European Commission, the UK charges a premium of up to $1 per passenger per flight, depending on the amount of cover requested by the airline concerned. Airports and other ground service providers are charged a proportion of the premium they paid before cover was withdrawn. The total costs to Government are unquantifiable at this time, as they depend on potential claims, if any, made under the scheme. There are also legal costs, the final amounts of which are not known. The Government will consider whether any residual insurance support may be justified after the present arrangements expire on 20 March.
The Secretary of State has received representations from the British Air Transport Association, seeking an extension of the scheme until the insurance market has stabilised or other arrangements have been put in place.