Insurance and reinsurance

Captive insurance

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

There is no Dutch law requirement that insurance is placed with insurers or underwriters in the Netherlands.

Regulation (EC) No. 785/2004, as amended by Regulation (EC) No. 1137/2008 and Regulation (EU) No. 285/2010, which is applicable in the Netherlands, contains minimum liability insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties, for both commercial and private flights. Under Regulation (EC) No. 785/2004, air carriers and aircraft operators are required to be insured to cover the risks associated with aviation-specific liability (including acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion).

Cut-through clauses

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

Yes, cut-through clauses are legally effective.

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 reinsurances by the insurer in favour of the lessor, and a reassignment of reinsurances by the lessor in favour of the financier are common in lease transactions. However, as pursuant to section 3:84(3) of the Dutch Civil Code, security assignments are not valid under Dutch law, these assignments are usually governed by English (or other foreign) law. If valid and enforceable under English (or such other foreign) law, the security assignment would be given effect to by the Dutch courts if and to the extent that the security assignment fits in the closed system of Dutch security rights and preferred rights.

Liability

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

No, an owner, lessor or financier cannot be held liable for the operation of the aircraft or the activities of the operator (provided that any such liability is not based on the owner’s, lessor’s or financier’s own acts or omissions that would qualify as an act of tort).

Strict liability

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

No, in the Netherlands there is no regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft.

Third-party liability insurance

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

Yes, see question 30.