Title 49 — TransportationRelease 119-73not60
§44306 Premiums and Limitations on Coverage and Claims
Title 49 › Subtitle SUBTITLE VII— AVIATION PROGRAMS › Part A— AIR COMMERCE AND SAFETY › Subpart iii— safety › Chapter 443— INSURANCE › § 44306
Summary
Insurance premiums should be based on the actual risk as much as possible. When setting reinsurance rates, the Secretary may let an insurance company include reasonable costs for services and facilities, but not payments made to stimulate or solicit business. The Secretary of Transportation can offer insurance or reinsurance for up to 1 year at a time. It can be renewed for more 1-year periods only if the President approves each renewal because the aircraft’s continued use is needed for air commerce, national security, or U.S. foreign policy. Each policy must state a payment limit no higher than the aircraft’s value as set by the Secretary using normal commercial insurance practices, and no claim can exceed that limit.
Full Legal Text
Title 49, §44306
Transportation — Source: USLM XML via OLRC
(a)To the extent practical, the premium charged for insurance or reinsurance under this chapter shall be based on consideration of the risk involved.
(b)In setting premium rates for reinsurance, the Secretary may make allowances to the insurance carrier for expenses incurred in providing services and facilities that the Secretary considers good business practices, except for payments by the insurance carrier for the stimulation or solicitation of insurance business.
(c)The Secretary of Transportation may provide insurance and reinsurance under this chapter for a period of not more than 1 year. The period may be extended for additional periods of not more than 1 year each only if the President decides, before each additional period, that the continued operation of the aircraft to be insured or reinsured is necessary in the interest of air commerce or national security or to carry out the foreign policy of the United States Government.
(d)The insurance policy on an aircraft insured or reinsured under this chapter shall specify a stated amount that is not more than the value of the aircraft, as determined by the Secretary in accordance with reasonable business practices in the commercial aviation insurance industry. A claim under the policy may not be paid for more than that stated amount.
Legislative History
Notes & Related Subsidiaries
Historical and Revision Notes
Revised SectionSource (U.S. Code)Source (Statutes at Large) 44306(a)49 App.:1532(b).Aug. 23, 1958, Pub. L. 85–726, § 1302(b), (c), 72 Stat. 801; restated Nov. 9, 1977, Pub. L. 95–163, § 2, 91 Stat. 1279. 44306(b)49 App.:1532(c). 44306(c)49 App.:1537(a) (last sentence less words between 2d and 3d commas).Aug. 23, 1958, Pub. L. 85–726, § 1307(a) (last sentence less words between 2d and 3d commas), 72 Stat. 804; Oct. 4, 1984, Pub. L. 98–443, § 9(b), 98 Stat. 1706. In subsection (a), the words “To the extent” are substituted for “insofar as” for consistency. In subsection (b), the word “initial” is omitted as surplus. The words “The period” are substituted for “Such insurance or reinsurance”, and the words “the President decides . . . that the continued operation of the aircraft to be insured or reinsured is necessary to carry out the foreign policy of the United States Government” are substituted for “the President makes the same determination with respect to such extension as he is required to make under paragraph (2) of subsection (a) of this section for the initial provision of such insurance or reinsurance”, for clarity. In subsection (c), the words “or reinsured” are added for consistency. The words “to be paid in the event of total loss” are omitted as unnecessary because of the last sentence. The words “A claim under the policy may not be paid for more than that stated amount” are substituted for “the amount of any claim which is compromised, settled, adjusted, or paid shall in no event exceed such stated amount” to eliminate unnecessary words.
Editorial Notes
Amendments
2003—Subsec. (b). Pub. L. 108–176, § 106(c), substituted “by the insurance carrier” for “by the air carrier”. Subsec. (c). Pub. L. 108–176, § 106(e), made technical correction to directory language of Pub. L. 107–71, § 124(b). See 2001 Amendment note below. 2002—Subsec. (c). Pub. L. 107–296 made technical correction to directory language of Pub. L. 107–71, § 147. See 2001 Amendment note below. 2001—Subsec. (b). Pub. L. 107–42, § 201(d)(2), added subsec. (b). Former subsec. (b) redesignated (c). Subsec. (c). Pub.L. 107–71, § 147, as amended by Pub. L. 107–296, substituted “1 year” for “60 days” in two places. Pub. L. 107–71, § 124(b), as amended by Pub. L. 108–176, § 106(e), inserted “in the interest of air commerce or national security or” before “to carry out the foreign policy”. Pub. L. 107–42, § 201(d)(1), redesignated subsec. (b) as (c). Former subsec. (c) redesignated (d). Subsec. (d). Pub. L. 107–42, § 201(d)(1), redesignated subsec. (c) as (d). 1997—Subsec. (c). Pub. L. 105–137 substituted “as determined by the Secretary in accordance with reasonable business practices in the commercial aviation insurance industry.” for “as determined by the Secretary.”
Statutory Notes and Related Subsidiaries
Effective Date
of 2003 AmendmentAmendment by section 106(c) of Pub. L. 108–176 applicable only to fiscal years beginning after Sept. 30, 2003, except as otherwise specifically provided, see section 3 of Pub. L. 108–176, set out as a note under section 106 of this title. Pub. L. 108–176, title I, § 106(e), Dec. 12, 2003, 117 Stat. 2499, provided that the amendment made by section 106(e) is effective Nov. 19, 2001.
Effective Date
of 2002 Amendment Pub. L. 107–296, title XII, § 1203, Nov. 25, 2002, 116 Stat. 2287, provided that the amendment made by section 1203 is effective Nov. 19, 2001. Delegation of Authority Authority of President under subsec. (c) of this section delegated to Secretary of Transportation, with certain conditions, by Memorandum of President of the United States, Dec. 27, 2013, 79 F.R. 527, set out as a note under section 44302 of this title.
Reference
Citations & Metadata
Citation
49 U.S.C. § 44306
Title 49 — Transportation
Last Updated
Apr 5, 2026
Release point: 119-73not60