Insurance and reinsuranceCaptive insurance
Summarise any captive insurance regime in your jurisdiction as applicable to aviation.
The insurance regime applicable in Italy is that set out by the European legal framework for all EU member states (mainly Regulation (EC) No. 785/2004, as amended by Regulation (EU) No. 285/2010). Accordingly, the Italian laws and regulations on aviation insurance are meant to reflect and implement the EU legislation.
Insurance for civil aircraft can be placed with Italian or foreign insurers at the operator’s own choice, as long as the relevant insurers are duly licensed to run their business and the agreed coverage is compliant with the requirements set out by the aforementioned EU legal framework in respect of passengers, baggage, cargo and third parties. It is noteworthy that the EU legislation applies to all airlines and aircraft operators flying into, out of, or over the territory of an EU member state, irrespective of their nationality.Cut-through clauses
Are cut-through clauses under the insurance and reinsurance documentation legally effective?
Generally speaking, cut-through clauses under insurance and reinsurance documentation are legally effective in Italy.Reinsurance
Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?
Assignments of reinsurance are typically executed in connection with aircraft leasing and finance transactions, always provided that - as a general principle - any assignment of rights against an Italian debtor is legally effective upon the assignment being duly notified to, or accepted by, the debtor, pursuant to article 1264 of the Italian Civil Code.Liability
Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?
An owner, lessor or financier is not liable for the operation of the aircraft or the activities of the operator as long as the statement of the operator is duly rendered by the aircraft operator and recorded with the Italian Aircraft Registry, pursuant to article 874 of the Italian Navigation Code. Once the said statement is recorded with the Italian Aircraft Registry, the operator is exclusively liable for the operation, maintenance and insurance of the aircraft.Strict liability
Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?
Generally speaking, no, provided the considerations on priority liens and rights arising by operation of law, mentioned in question 24, are complied with.Third-party liability insurance
Are there minimum requirements for the amount of third-party liability cover that must be in place?
Airlines and aircraft operators shall be insured in accordance with Regulation (EC) No. 785/2004 (as amended by Regulation (EU) No. 285/2010) with regard to their aviation-specific liability for passengers, baggage, cargo and third parties. The insured risks shall include acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion. In particular:
- for liability in respect of passengers, the minimum insurance cover shall be 250,000 special drawing rights (SDRs) per passenger (at present, approximately equal to €322,172);
- for liability in respect of baggage, the minimum insurance cover shall be 1,131 SDRs per passenger in commercial operations (at present, approximately equal to €1,457);
- for liability in respect of cargo, the minimum insurance cover shall be 19 SDRs (at present, approximately equal to €24); and
- for liability in respect of third parties, the minimum insurance cover per accident is determined on the basis of the aircraft MTOW (for instance, aircraft between 50 and 200 tonnes shall be insured for €386 million and aircraft over 500 tonnes shall be insured for €902 million).