A new blow has been dealt with Russian air carriers – and this time from the Russian side. Carriers have faced problems in the reinsurance of aircraft, and, according to Kommersant, it is about the refusal of the Russian National Reinsurance Company (RNPC) to cover risks related to aircraft maintenance against the background of the suspension of support for manufacturers due to sanctions – that is, Airbus and Boeing. The reason, according to the publication’s sources, is that in the event of insurance claims, the issue could potentially lead to years-long disputes over damages and would affect, in particular, payments to passengers.
“Kommersant” clarifies that the Russian National Reinsurance Company (RNPC), a structure of the Central Bank of the Russian Federation, began to assume obligations under carrier reinsurance contracts in March when European players refused them due to sanctions. At the same time, the Central Bank increased the declared capital of RNPC from 71 to 300 billion rubles, and the guarantee was extended to 750 billion rubles. However, by the summer, when many carriers were due to renew their annual contracts, they faced “attempts to significantly limit insurance coverage.”
In the first stage, coverage of the risks of seizure and confiscation of military equipment was excluded from the contracts. But this was not the end of the matter: in the updated contracts there was a line that accidents resulting from poor maintenance or repair are not considered an insured event. “European contracts have traditionally stated that the aircraft is repaired by the manufacturer, developer, or an organization certified by it. Now we are deciding how to solve this problem,” explains one of Kommersant’s interlocutors from the aviation industry. He added that the company hopes to resolve the situation in the coming weeks.
According to one of the sources, insurance and reinsurance contracts are being renewed now “on individual terms.” The newspaper reported that the reinsurance was completed by S7, but it is not known on what terms Ingosstrakh agreed with the reinsurer. The existence of the “problem of increased risk” was confirmed by Ilya Kabachnyk, Deputy General Director for Aviation Insurance of “AlfaStrahuvannia”. He stated that the problem is that “the terms of the coverage must be clear to both the insurer and the client,” otherwise the carriers’ fears of lengthy proceedings and disputes regarding insurance events may be justified, which “doesn’t benefit anyone.”
A source close to Aeroflot, in turn, said that the national carrier has informed the Air Transport Operators Association (AEVT) about the problem of the Ministry of Transport: “Lawyers are fighting over the maximum preservation of coverage, taking into account the successful passing by the technical center of the Rosaviatsia audit to obtain a developer’s certificate.” “In case of lack of understanding with RNPC”, the aviation industry plans to send a request to the government.