FAA REACTS TO CONGRESSIONAL CALL FOR SPACE INSURANCE REVIEW
Responding to congressional directive, FAA will call 2-day meeting April 25-26 at its Washington hq to get public comments on insurance requirements for commercial space launch and reentry activities. Meeting will be open to public and will allow agency to “explore the different issues,” including whether govt. should continue to insure launches against failures beyond required insurance, said Esta Rosenberg, FAA attorney. In addition to regular commercial launch insurance, govt. provides umbrella policy to cover “catastrophic failure” of communications or other satellite that causes more than $500 million damage, including to facilities on ground, said Clayton Mowry, exec. dir-Satellite Industry Assn. (SIA). Maximum govt. liability is $1.5 billion.
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Congress asked FAA to address 7 issues: (1) Adequacy, propriety and effectiveness of and need for current scheme. (2) Examination of regimes in other countries. (3) Appropriateness of calling space transportation activities “ultrahazardous” activities. (4) Effect of international treaties on liability. (5) Appropriateness of evolving regime to approach of airline liability. (6) Need for changes in indemnification policy to accommodate risks associated with commercial spaceport operations. (7) Recommendation of appropriate changes and actions required to accomplish changes.
Congress required FAA to call public meeting on Commercial Space Transportation Competitiveness Act (CSTCA) which renewed existing indemnification agreement for 4 years, ending in 2004. Original agreement was to expire in 1993, but was extended twice, by 6 years in 1993 and one year in 1999. When Congress approved 4-year extension in CSTCA, it asked FAA to study whether govt. should cover such failures. “There have been questions about… whether or not [indemnification] is really needed,” Mowry said.
“Indemnification has sort of become an automatic expectation,” congressional source told us. “It occurred to many of the members ‘Is this the most efficient way'?” House Space & Aeronautics Subcommittee Chmn. Rohrabacher introduced bill, which passed with bipartisan support, official said.
Mowry said he expected industry to support continuing current regime, saying “it hasn’t cost the U.S. government any money” because govt. hadn’t yet had to step in to pay for launch failures. Failure such as debris from satellite’s re-entering atmosphere and damaging property on ground never has happened, he said. FAA spokesman said “we've not approached [$500 million].” Purpose of meeting is not to establish future plans, he said, but “it’s to learn how to formulate the future.”