Ex Im Bank Continues to Monitor Aviation Third Party War Risk Insurance Developments
FOR IMMEDIATE RELEASE September 30, 2001
Cheryl Crispen (202) 565-3200
The Export-Import Bank of the United States (Ex-Im Bank) today notified all airlines operating Ex-Im Bank-supported aircraft that it will refrain for 10 more days from exercising its rights regarding required amounts of third party war risk liability insurance. Ex-Im Bank's action is aimed at giving airlines time to make necessary arrangements with commercial insurers and/or government sources. An airline availing itself of the extension will be required to provide Ex-Im Bank with information on the airline's ability to access any government support and war risk liability insurance, as well as the additional cost of all of the airline's war risk insurance including hull and liability insurance.
As a direct consequence of the September 11, 2001 terrorist attacks the international aviation industry took actions to cancel and then reinstate, on a very limited basis, coverage for third party liability arising from war and related perils. Many governments including the United States quickly agreed to provide, for a limited time, gap third party war risk liability insurance coverage for their domestic air carriers to avoid a major disruption to the global air transport system.
On September 24, 2001, Ex-Im Bank responded to the cancellation by the international aviation insurance industry of most coverage of third party liability arising from war and terrorism by announcing that it would not enforce, for seven days, its rights to require third-party war risk liability insurance coverage above that which was currently available. Other aviation financiers and operating lessors made similar announcements. Since the announcement of the reduced limits for third party war risk liability insurance, the commercial insurance industry has re-entered the market with substantially higher limits.
Today's further Ex-Im Bank extension is subject to revocation upon 24 hours' prior written notice from Ex-Im Bank and does not affect the rights of any other parties (including other financiers) or any airline's obligations to comply with all laws and regulations in all applicable jurisdictions. Ex-Im Bank does not make any comment on any aspects of any airline's business or operations, including any decision by an airline to operate or not operate any aircraft or any route.
Ex-Im Bank is an independent U.S. government agency that helps finance the sale of U.S. exports primarily to emerging markets throughout the word by providing loans, guarantees and insurance. Ex-Im Bank supported $15.5 billion in U.S. exports in fiscal year 2000.