By Adedapo Adesanya
The Nigeria Civil Aviation Authority (NCAA) has urged airlines and other service providers in the subsector to comply with the Nigerian Civil Aviation Regulations (Nig. CARs) 2022 on insurance cover.
This was disclosed by NCAA Director-General, Mr Musa Nuhu, in a directive contained in an all operators letter, referenced NCAA/DG/AIR/11/16/369 signed August 11, 2023, was addressed to all airlines and allied aviation service providers.
According to the NCAA DG, the need for compliance is a sequel to the coming into force of Nig. CARs 2022 on 10th July, 2023 which makes it mandatory for all airlines to comply with Part 18.14.1.1 of the regulations.
“Specifically, Part 18.14.1.1 of the regulations provides, amongst others, that all airlines and other allied aviation service providers must not operate without adequate and valid insurance cover, submitting to the authority copies of valid insurance certificates.
“They must also provide evidence of payment of premium and other policy documents of insurance cover of not less than three months as specified in IS: 18.14.1.1.
“Having insurance document which must be adequate and renewed before the expiration of the current policy and be submitted to the NCAA as soon as it is renewed,“ Mr Nuhu stated in the statement.
He said non-adherence to the regulation would attract immediate sanctions, including the grounding of the specific aircraft, and taking enforcement action against any airline or service provider that defaulted.
Since the Warsaw Convention of 1929, aviation insurance has been made mandatory for global operators to provide coverage for hull losses, as well as liability for passenger injuries and environmental and third-party damage caused by aircraft accidents.
The NCAA Act of 2006, 74 (1) provides that “any carrier operating air transport services to, from or within Nigeria, or aerodrome operator, aviation fuel supplier, or any provider of ground handling services, meteorological services, air traffic control services, aircraft maintenance services, or provider of such other class of allied service as the Authority may, from time to time, determine in writing shall maintain adequate insurance covering its liability under this Act, and also its liability towards compensation for damages that may be sustained by third parties for an amount to be specified in regulations made by the Authority.”
Unlike other sectors, aviation is high-end, with special risk and attendant high premiums. However, Nigerian aircraft have a higher premium. For instance, the insurance premium on an average aircraft is put between one to two per cent of the entire value in Europe and North America. For aircraft flown in the “high-risk” African region, the insurance goes for between three and five per cent of the entire value.
Across a total of 98 commercial aircraft in the country, the average total insurance premium on aircraft alone is N5.88 billion yearly. To insure passengers require an additional N5 billion minimum.
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