Insurance and reinsurance

Captive insurance

Summarise any captive insurance regime in your jurisdiction as applicable to aviation.

Liability insurance is not only compulsory as per EU and Greek law, but is also a prerequisite for an aircraft to be operated in Greece. Any lawful interest exposed to aviation risks, inclusive of expected profit, may be the subject of aviation insurance (article 129 of GALC). Insurance cover of an air carrier’s liability for damages deriving from a contract of carriage to passengers, goods or luggage is compulsory (article 137, section 1 of GALC). Any aircraft operator should also insure his or her eventual liability for damages caused to crew members or other persons on board the aircraft for the service of a flight, as well as to third parties on the ground (article 137, section 2 of GALC). The aircraft’s insurance cover is also compulsory and extends to the aircraft’s hull, its components and parts (article 131 of GALC). Thus, the most usual kinds of aviation insurance in Greek jurisdiction are (i) liability insurance for damages caused to passengers or crew members on board the aircraft during its operation or to third parties on the ground; (ii) casualty or accident insurance; and (iii) hull insurance, covering damage caused to the aircraft. There is no domestic requirement that insurance should necessarily be placed in Greek jurisdiction. Special legislation specifies the minimum percentage of the insurance, with the reservation of articles 110 and 112 of GALC (article 137, section 4 of GALC). No single local captive insurer is used; risks may be spread among more than one insurance companies.

Cut-through clauses

Are cut-through clauses under the insurance and reinsurance documentation legally effective?

Yes, cut-through clauses are legally effective, depending on the exact content of each specific agreement.

Reinsurance

Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?

Yes, assignments of reinsurance are, in general, legally effective, subject to the specific provisions of the assignment agreement, and may also be provided on aviation leasing and finance transactions.

Liability

Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?

The aircraft’s operator and its owner are jointly liable for damages caused to third parties on the ground by the aircraft while in flight or by a person or object that fell from it (article 117 GALC - see also article 1 of the Rome Convention 1952). The operator’s obligation to compensation cannot exceed triple the aircraft’s value, if this was new on the day of the incident, whereas the owner’s liability does not exceed the actual value of the aircraft on the day of the occurrence (article 119, section 1 of GALC). In the case of an aircraft collision, the operator of the liable aircraft is liable for the damages caused (article 121, section 1 of GALC). Contributory negligence of the damaged person may reduce or even lift liability of the owner and operator (article 118 GALC). The operator is obliged to insure his or her liability for damages caused to passengers or crew members, as well as for damages caused to third parties on the ground (article 137, section 2 GALC). Violation of this obligation is a criminal offence (article 165 GALC). Except for the aforementioned cases, the owner is liable only when he or she is also the operator (ie, operates his or her own aircraft) or is the air carrier (Montreal Convention 1999, article 17 seq). Lessors or financiers are not liable.

Strict liability

Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?

See question 33.

Third-party liability insurance

Are there minimum requirements for the amount of third-party liability cover that must be in place?

Yes. As per article 6, section 1 of Regulation (EC) No. 785/2004, the minimum insurance cover for liability in respect of passengers is 250,000 Special Drawing Rights (SDRs) per passenger. However, in respect of non-commercial operations by aircraft with a MTOW of 2,700kg or less, member states may set a lower level of minimum insurance cover, provided that such cover is at least 100,000 SDRs per passenger. According to article 1, sections 2 and 3 respectively of Regulation (EU) No. 285/2010, amending the aforementioned Regulation (EU) No. 785/2004, for liability in respect of baggage, the minimum insurance cover is 1,131 SDRs per passenger in commercial operations, whereas for liability in respect of cargo, the minimum insurance cover is 19 SDRs per kilogram.