SUBCHAPTER N - WAR RISK INSURANCE
PART 198 - AVIATION INSURANCE
Sec.
198.1 Eligibility of aircraft operation for insurance.
198.3 Basis of insurance.
198.5 Types of insurance coverage available.
198.7 Amount of insurance coverage available.
198.9 Application for insurance.
198.11 Change in status of aircraft.
198.13 Premium insurance - payment of premiums.
198.15 Non-premium insurance - payment of
registration binders.
198.17 Ground support and other coverage.
AUTHORITY: 49 U.S.C. 106(g), 40113, 44301-
44310; 49 CFR 1.47(b).
SOURCE: Docket No. 28893, 63 FR 13739, Mar.
20, 1998, unless otherwise noted.

Section 198.1 Eligibility of aircraft operation
for insurance.
An aircraft operation is eligible for
insurance if - 
(a) The President of the United
States has determined that the continuation of that aircraft operation is
necessary to carry out the foreign policy of the United States;
(b) The aircraft operation is - 
(1) In foreign air commerce or between two or more places all of which
are outside the United States if insurance with premium is sought; or
(2) In domestic or foreign air commerce, or between two or more places
all of which are outside the United
States if insurance without premium is
sought; and
(c) The Administrator finds that
commercial insurance against loss or
damage arising out of any risk from
the aircraft operation cannot be obtained on reasonable terms from an insurance carrier.
Section 198.3 Basis of insurance.
(a) Premium insurance may be issued
by the FAA is the requirements of
Section 198.1 (a), (b)(1) and (c) are met.
(b) Subject to Section 198.9(c), standby insurance without premium may be
issued by the FAA if all of the following conditions have been met:
(1) A department, agency, or instrumentality of the U.S. Government

seeks performance of air services operations, pursuant to a contract of the
department, agency, or instrumentality; or transportation of military
forces or materiel on behalf of the
United States, pursuant to an agreement between the United States and a
foreign government.
(2) Such department, agency, or instrumentality of the U.S. Government
has agreed in writing to indemnify the
Secretary of Transportation against all
losses covered by such insurance. Such
an agreement, when countersigned by
the President, constitutes a determination that the continuation of that aircraft operation is necessary to carry
out the foreign policy of the United
States.
(3) A current copy of the aircraft operator-s applicable commercial insurance policy or policies is on file with
the FAA, including every endorsement
making a material change to the policy. Updated copies of these policies
must be provided upon each renewal of
the commercial policy. Every subsequent material change by endorsement
must be promptly provided to the FAA.
(c) Insurance is activated, placing the
insurance in full force, as specified by
the FAA-s written notification to the
operator and remains in force until
such time as either of the following occurs:
(1) The requirements in Section 198.1 are no
longer met; or
(2) In the case of non-premium insurance, an aircraft operation is no longer
performed under contract to a department, agency, or instrumentality of
the U.S. Government; or pursuant to
an agreement between the United
States and a foreign government; or
the Administrator finds that commercial insurance can now be obtained on
reasonable terms.
(d) Insurance policies revert to standby status upon written notification by
the FAA to the aircraft operator. A
policy will remain in standby status
until either - 
(1) The insurance is activated by
written notice; or
(2) The policy is canceled.

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