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VOL. 45 NO. 2 - SUMMER 2020

THE VIRTUAL AGENCY Updates from IS-BAO, IS-BAH, and the new NATA

Safety 1st Clean



IN THIS ISSUE Editor John Murray

Murray, Morin and Herman







President’s message


















The ideas and opinions expressed by authors of articles published in The Binder are wholly their own and do not necessarily represent those of the Aviation Insurance Association. The articles are not provided as legal advice.


Published by the Aviation Insurance Association 7200 W. 75th St. Overland Park, KS 66204


Focusing on Membership

The Lifeblood of our Association. The AIA is fortunate to enjoy a core membership that have remained active and loyal over the years. Many of those obtained and retain their CAIP designation as members. Others understand the value of networking while combining it with fun. Most of the core members are regular attendees at the annual conference as well as volunteers on the education committee, the foundation, writing articles for The Binder, or serving on the board. They are the lifeblood of our association. However, when you look at our membership demographics, it is apparent that our membership is driven largely around our annual convention with some individuals dropping their memberships if they are not planning on attending the conference.


The AIA is only as strong as its membership base. If we have learned nothing else from this pandemic, it is the value of a strong and dedicated membership base. Thanks to our core members, we are going to come out of 2020 on solid financial ground. Yes, overall, we will have a deficit for the year due to a drop in revenue, but it is far better than it could have been. If we can grow our membership we can reduce or even eliminate our dependency on the conference as our major source of revenue, plus provide seed money for new services and programs with the goal of improving the value of mem-

We Turned May and June into the Virtual 2020 Conference. • Executive Board Meetings done virtually eliminating the expense for travel and making it easier to serve on the board. • First Virtual Full Board Meeting was a success, allowing us to continue the business of the Association even though we could not meet in person. • Continuing Insurance Education conducted in one day with a full eight hours of credit. • Continuing Legal Education conducted over 2 days with a full eight hours of credit.


The AIA is Adapting to meet the Needs of our Membership The conference cancellation has had the silver lining of forcing us to adapt to a brave new world. It has helped us focus on our membership to provide benefits they missed from the conference. And, hopefully, expand the awareness of what the AIA can do for individual aviation professionals that may never go to a conference. It has also given us the opportunity to partner with Member Companies to provide education, and information to a larger group of aviation insurance professionals. We were heading down this path anyway but the pandemic has accelerated this process for the good. Some of our accomplishments in 2020: • Virtual Core Principles & Concepts Class. This had been in the planning for over 6 months and proved very successful, reaching our international members as well. We will have at least one if not two more this year. • Virtual Happy Hour. Every Tuesday during the Month of April and part of May, while the “stay at home” orders and economic shutdown was at its peak. These were fun and fed our need to socialize while working from home.

• Keynote Speaker Series Hour-long webinars featuring the keynote speakers scheduled for the Tucson conference, plus a few more: • Steve Blakey – President and CEO of Starr Aviation

• Jim Viola – President, Helicopter Association International

• Jim Landsburg – Vice President, National Transportation Board

• Mark Baker – President, AOPA


• Company Focus Series. Member Invitation Only. These exclusive sessions were inspired by the popular Queuing Up at AIA Series as part of the Agents & Brokers/Underwriters joint meeting at the annual conference. This is an exclusive webinar for each member underwriting company to address AIA Member Agents & Brokers with an update on their changes, challenges, and appetite. We address the current realities in the marketplace as well as a question and answer from brokers. Participating companies include: • Old Republic • USAIG • Hallmark/Aerospace Insurance Managers • Beacon • AXAXL • Starr • AIG • Great American • Global Aerospace • Allianz • Divisional Meetings. The Attorney and Underwriter Division held virtual meetings via webinar for the purpose of conducting elections for their respective division. The meetings allowed each candidate to address as well as questions and comments from the attending members. A secret ballot was taken via a pole to complete the election. • Committee Meetings. Life goes on as normal for the Education Committee, meeting through video conference instead of teleconference. At this writing, The Safety Committee is also planning on scheduling a meeting.

Virtually More to Come While we may take a little break in July, the Association will continue to plan for future events and build other services. Coming to a Webinar near you:


• Core Principle and Concepts class in late August or early September. • Continuing Education class on Ethics for 3 hours of CIE/CLE credits • Potential for a Virtual Toronto Conference with corresponding CIE or Core Principles Class. • Fall and Winter Binders in October and late December/early January. • Updating and improving our website to include a more robust Members Only section.

Be A Member - The Future is Now. None of us really knows how this pandemic is going to play out and when people will feel safe to travel again. While we are planning on having the conference in New Orleans next April, one thing is perfectly clear – we can no longer afford to depend on the Annual Conference as our main revenue source. We must develop new revenue streams through education opportunities and tapping vendors and Associate Members. But growing our membership base will provide the Association with the Anchor we need to steady the ship and keep us on an even keel. If you are an AIA Member, thank you for your support. If you are a nonmember or past member, while reading this article and the Binder we ask you to consider the benefits of being a member and urge you to join us to make the Aviation Insurance Association stronger. Our membership dues are far lower than other associations, even the small regional associations like the GBAA and others. Whether you are a member or not, we want to hear from you. Tell us what you need or what we can do better to make our Association a more valuable tool in your business and career.






hether you were any early embracer of technology or a “Johnny-come-lately”, we were all thrust into unchartered waters in March when Covid stay at home or shelter in place orders closed many of our offices. Insurance brokerage services fall within the definition of essential businesses in most jurisdictions, but with no clients visiting, who was going to make employees trudge into the office and risk exposure to sit at a computer they could just as easily sit in front of at home? With children out of school and many daycares closed, coming to the office, even if mandated, would have been impossible for many and a gut punch to employee morale overall. I was out of the country visiting an airline client in the Caribbean when the virus hit the fan and returning home on March 16th, it felt like the world was closing in on me. While that made the onset of the pandemic a bit of a whirlwind personally, it ended up being a surprisingly seamless process on the business end of things. My employees simply brought home their computers,


downloaded an app for our phone system, redirected our snail mail and we were in business. I am no great prognosticator, but everything ran seamlessly because over the past few years, I had converted our agency files and accounting records to a secure cloud-based agency management system and adopted VOIP phone technology. It hit me for the first time just how far we had come technologically last August when I was sitting in a café in Johannesburg, South Africa enjoying coffee before a business meeting, and returned a client call from our office line linked to a VOIP app on my cellphone while pulling the client’s account up on my laptop. I was able to answer all his coverage questions and even tell him how much money was outstanding from several recent policy changes. Before we got off the line, my client said he would stop by the office to say hi that afternoon. When I informed him that I was about 7,700 miles away, he did not believe me at first. In that moment I realized my brick and mortar agency had truly become virtual!

I was surprised to hear from underwriters that some of their brokers struggled with the work at home transition and were not set up to effectively service clients that way. Change can be difficult for anyone, and I think new ways of doing things can face particularly strong headwinds in the insurance industry, probably because we tend to be more conservative and risk adverse (or at least that’s the excuse I like to give!). Whether well prepared or improvising on the fly, I think every broker has had to learn to run their agency virtually to at least some degree during these times. The silver lining is that we will all be better prepared to leverage the best in technology to ensure business continuity and seamless operations during a future pandemic or other unprecedented catastrophe. Another plus is that these changes now allow you to work from a beach cabana on some exotic island or anywhere else in the world for that matter, your clients and underwriters none the wiser so long as you have a strong internet signal and a powerful laptop! The big questions that remain are how and when our lives

will return to normal and whether our ways of conducting business and working are forever changed. Some things will be different, but not necessarily in a bad way. As predominantly white-collar, our industry is particularly conducive to remote work so I think agency principals will have no choice but to offer at least some degree of work from home flexibility going forward. According to a recent Gallup poll, 60% of Americans would prefer to continue working remotely as much as possible, something that was only practiced by 3.4% of Americans in 2019. If you have good people, you will probably find they are more productive in a remote working environment with fewer distractions, and they may be happier with a better work/life balance when able to replace a long commute with more family time. If, on the other hand, you can’t trust your staff to get their work done effectively outside the boss’s field of vision, you probably hired the wrong people and should take some time to reflect upon that. Another trend we may see is clients and prospects wanting to schedule meetings via videoconference instead of

meeting in person. I’ve appreciated the efficiency of this on several occasions recently when I’ve been able to accomplish an hour meeting in exactly one hour via Zoom vs. the half day or more I would normally take to travel to a client, make the obligatory small talk, meet and then trek back home (though the travel was a plus when I could log some flight time). While Zoom is more effective than a conference call because you can see faces and pick up on subtle non-verbal cues, it still cannot replace the intimacy and connection of a face to face meeting, and nothing will build rapport more than breaking bread with someone after business is done. Some things will never change, and though there will remain a place for Zoom in our post pandemic world, spending quality time in person with a client or prospect you value is something that should always remain a top priority. Having been in the insurance industry for a while, I’ve found that insurance producers are either larger than life personalities who win clients over through their charisma or “professors of insurance” who acquire new clients by demonstrating extensive technical knowledge (extra credit if you can guess which one I am). In truth, people usually fall somewhere on the continuum but will tend towards one type or the other based on underlying extroverted or introverted personality type. In this world of remote working and the virtual agency there will be less opportunities to schmooze clients and prospects so the


former of the two types mentioned may find things more challenging. This presents a good opportunity for these folks to become students of insurance and beef up their technical knowledge so they can become an unbeatable powerhouse of both charisma and expertise (hint: a virtual CAIP course offering is forthcoming). For the “professors of insurance”, this is your time to shine, minus all the painful small talk and awkward cocktail parties! Use this opportunity to find new and creative ways to showcase your knowledge, develop prospects into loyal clients and nurture existing relationships. As I write this, many states are well on their way to opening their economies and my clients are calling to take aircraft off lay-up. These are hopeful signs that life and the economy can stabilize at our new normal whatever that ends up being. With aversion to commercial airline travel entrenched in the public mind for the near future, the optimist in me predicts there will be a boost to general aviation in the coming months. However, until there is a vaccine, the future will remain uncertain, and no matter what happens some of the changes made and the technology embraced will endure. Like it or not, the virtual agency is here to stay in some form or fashion, though we all need to find ways to keep it real and retain the intimate personal connections that are such an important part of our value as a broker, even when it requires six feet of separation.





THE NEW WORLD ROBERT WILLIAMS - Schnader Harrison Segal & Lewis LLP


his was supposed to be the Attorneys’ Division report that recounts all of the wonderful experiences that we had in Tucson at the Annual Meeting. Instead of four days in sunny Tucson, all of us have spent the last several months staring at the walls in relative seclusion and isolation. The good news, as you know, is that your Aviation Insurance Association rose to the challenge and delivered a spectacular remote program. I would like to take this opportunity to extend our warmest gratitude to all who made that possible, including the AIA Executive Committee, everyone who participated on a remote basis, and most of all, the speakers, panelists and presenters! In the wake of the pandemic, the use of remote or video depositions has increased significantly. Several jurisdictions have acted to facilitate that development. For


example, Supreme Courts in Florida and Illinois suspended the requirement that the witness and officer administering the oath to the witness be in the same physical location. Other jurisdictions, such as the Supreme Court of New Jersey and the Court of Common Pleas of Philadelphia County, Pennsylvania have merely “encouraged” the parties to take remote depositions. Whether expressly authorized by the court or conducted by agreement of the parties, remote or video depositions present new issues that are worthy of consideration. During an in-person deposition, counsel can see everyone in the room and monitor the witness’ access to personal electronic devices while testimony is underway. For remote depositions, counsel may want to ensure that unwanted visitors are not in the room with the witness and that the witness places his or her electronic devices outside of arms’ reach while testimony is being

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given. It also may be necessary to circulate proposed deposition exhibits in advance of the deposition and negotiate terms and conditions for that circulation. Remote mediations have been a mixed bag. Former Chief Judge of the United States District Court for the Northern District of California Vaughn Walker, who now works as an arbitrator and mediator, reported that many of his mediations were canceled due to inability to conduct them in person. Conversely, the International Institute for Conflict Prevention and Resolution has seen two to three times as many mediations. The incoming president of the Southern California Mediation Association reports an increase in remote mediations of about one-third. Like depositions, remote mediations present new considerations for parties and counsel. Opening statements and group presentations can be more cumbersome and less effective. It is far more difficult to read

a person’s body language from a two-dimensional video screen. Furthermore, parties and counsel have not spent hours or days and hundreds or thousands of dollars to travel to the mediation, rendering it much easier to “walk out” electronically by pushing the “End Meeting” button. On the other hand, if the parties schedule a remote mediation to resolve a case that has been hopelessly delayed by pandemic-induced court closures, their motivation can overcome these technical obstacles. Welcome to the New World! I am confident that the members of the Attorney Division will continue to serve their clients and the aviation insurance industry with honor and distinction. I encourage you to reach out to each other to share your experiences, ask questions and even commiserate. As always, we are here to help. Please do not hesitate to contact us if there is anything we can do for you. Be safe.



This is going to be big.

Craig Walker - McLarens General Aviation “This is going to be big” is a text message I was awoken to at 5:30 AM on March 3, 2020 sent by the local aircraft recovery company, AMF Aviation. As the storm struck the Nashville, Tennessee area earlier that morning (12:41 AM) I had no idea what AMF was referring to and responded by asking what he was talking about and why he was waking me up at 5:30 in the morning. A quick flip of the television remote control answered that question. An EF-4 tornado had just ripped through Nashville. The tornado was on the ground for 60.13 miles and left a path of destruction as wide as 500 yards in many areas. In its path was the John C Tune Airport. An airport I was all too familiar with as the “Tune” Airport, as locals call it, was where I was based for eight years before moving to another airport north of town.


A local TV news station, Channel 5, would have normally dispatched their Bell 206 helicopter to take aerial photos of the damage; but that helicopter, with its multi-million-dollar camera equipment, was also based at the Tune Airport and was heavily damaged. Therefore, UAVs launched to give us some of the first aerial views of the destruction. They depicted the entire airport destroyed. What remained out of the 21 rows of T-hangars and 3 corporate hangars were only 6 rows of T-hangars and a heavily damaged terminal building. That terminal building is leased to Corporate Flight Management, a 24/7 fixed base operator. Two FBO employees that were in the building when the tornado hit hunkered down in the building’s bathroom and escaped injury as the front windows were blown in and the roof was partially ripped off. Three corporate hangars, which Corporate Flight Management leases from the Nashville Airport Authority (MNAA), were destroyed. Those hangars housed multiple jets, including ones owned by country and rock musicians, a well-known financial advisor, and other local and transient business owners.


Shortly after learning of the storm damage, the emails started rolling in. After the dust settled, McLarens General Aviation received 32 instructions from multiple insurance carriers. Needless to say, those carriers had a large exposure at the Tune Airport. The aircraft ranged from a Challenger 300 to light sport aircraft and everything in between. As the number of losses started to compile, we brought in two other Southeast based adjusters, Eric Weidner & and David Gourgues, to assist with the initial barrage of losses. With a catastrophe such as this one and hurricanes, which seem to annually wreak havoc on our southern states, the insurers are of course very anxious to identify their policyholder’s aircraft so claims can be initiated, and reserves set. As independent adjusters, we endeavor to get to the airports quickly in order to generate a list of aircraft registration numbers. Those numbers are then circulated to all the insurers so they can check to see if their insured’s aircraft were damaged and if so how badly they were damaged. As a background, the Tune Airport is owned by the City of Nashville, who has multiple departments, an airport board, and a staff of attorneys requiring input for each. A bureaucratic nightmare as a layman might call it. In my 27 years of adjusting, much of which was in Florida,


I have worked many catastrophes before. With multiple fuel spills and electrical lines down, access to the airport was denied for the first two days after the storm passed. After the airport was deemed safe, we implored the powers that be to allow us access to the airport with attempting to explain that we were here to be part of the solution. Finally, a decision was made by the airport authorities to allow 60 minutes of access to aircraft owners and their insurance representatives. The owners and their adjusters would have to sign up for a time slot designated on a website. Once we were signed up for timeslot, we had to convene at a building near the airport where we would board a tour bus. That tour bus would then take us in and drop us off in a designated area. Handlers would then meet us at that designated area and would shadow us on our walk until 60-minute time was up. The shadow agent would not allow us to enter areas either fenced in or marked by red paint “do not enter.” As you might imagine many of the aircraft were behind these protected areas making the job as an adjuster difficult at best. We would then re-board the bus and return to the point of departure. This continued for several days with 60 minute increments of access. We continued to advocate on behalf of all of the insurance community for better access to the airport over this timeframe. The challenges for access eventually lead

In all, 95 aircraft were destroyed or damaged. The city of Nashville lost 25 of its citizens, 310 were injured, and thousands of buildings in the area were damaged. The airport sustained an estimated 93 million dollars in infrastructure damage.

to a discussion with one of the board members that we simply needed to be able to access the aircraft to a point where photos could be taken, a list of damages reported, and avionics pulled. We would then want to arrange the extraction of the aircraft from the collapsed structures. The tipping point arose when the board member said that we could have all the access we wanted once the collapsed building material and the aircraft salvage was hauled off to a scrapyard. Yes, you read that correctly, an airport board member stated that all of the aircraft would be accessible at a scrapyard. I quickly countered by saying that this would not be acceptable, explaining that even though most of the aircraft appeared destroyed, the insurers of those aircraft would be interested in recouping their losses from salvage recovery. His response was, “That’s not my problem.” Fortunately, calmer heads prevailed over the days and weeks following the initial frantic response with the authorities eventually loosening the reins. Safety is paramount and the delay in the airport initially denying access is understood, but this should also serve as a reminder of the importance of having “boots on the ground” when a catastrophe arises … imagine if the airport had proceeded with scrapping even one of the damaged aircraft with the collapsed hangar structure.

Currently nearly all the aircraft have been disassembled and relocated to offsite aircraft storage facilities. Many of the aircraft are now hitting the salvage market. As an example, approximately 20 Cirrus aircraft were deemed total losses and we are starting to see a lower return on the salvage value as the market becomes flooded. There are several that are waiting repair plans, which has been complicated as the COVID-19 pandemic shutdown occurred two weeks after the tornado struck. In all, 95 aircraft were destroyed or damaged. The city of Nashville lost 25 of its citizens, 310 were injured, and thousands of buildings in the area were damaged. The airport sustained an estimated 93 million dollars in infrastructure damage. Shortly after the tornado hit Nashville, three other tornadoes struck Jonesboro, Arkansas; Monroe, Louisiana; and Walterboro, South Carolina. This has thus far been an expensive spring for insurers and reinsurers. We hope this sheds some light on the challenges of claims adjusting after a catastrophic event and, as the text message received on the morning of March 3, 2020 forewarned, this was a “big deal.”



Impact OF THE SERIES OF TORNADOES on aviation insurers this spring

Walter Voigts-VonForster. - MUNICH RE

Photos: Eric Weidner, McLarens Aviation

What happened?


s an aviation insurance professional you will be well aware of the tornado striking John C. Tune Airport in Nashville on

March 3rd of this year, damaging many aircraft mostly beyond repair. This article looks to investigate the implications for insurers and suggests some conclusions to take from the event.


The EF2 tornado (with peak winds 111 to 135 mph) struck at 1:00 on March 3rd, a time at which most aircraft would probably be on the ground. It hit close to terminal buildings and destroyed a series of hangars. At Munich Re we have identified 92 aircraft that were damaged or destroyed by the storm, with a total sum insured of 110 million USD. The initial estimates for the total claims are about 100 million USD, with salvage hopefully bringing this figure down a bit. The bulk of the damaged aircraft by number was piston powered with 74, plus 11 turbo prop, 17 jet and 3 rotor wing aircraft affected. In terms of insured values the jet aircraft made up 60% of total damage and another 28% stemming from the turboprops. FAA data on the airport would suggest that 154 GA aircraft are based at this airport and by that measure 60% of the aircraft based at the airport were impacted by the strong winds. In the data we collected on the event we note 13 insurers of general aviation aircraft are affected by the loss, with numbers of insured aircraft ranging between 1 and 18. It’s thus been a true market event. Clearly the high value jets are driving the loss ratio for individual insurers, but overall we would assume this event will cost between 5% to 10% of most insurers’ gross written premium and so it does make a dent to the annual result when this comes on top of “regular” losses.

Considerations for underwriters Capturing the base airport of insured aircraft in the underwriting system is a first step for controlling and rating accumulation. From a little survey conducted for this article across GA underwriters in the USA it seems the information of where aircraft are based is readily available and it is mostly captured in the IT systems of underwriters (everybody stores this for those risks which


are quoted automatically, i.e. light aircraft, whereas for larger aircraft there is some variation in capabilities of underwriting systems). All underwriters responded they would use the airport information to assess the appropriateness of the infrastructure for the type of aircraft to be insured. Underwriter approaches are somewhat different when it comes to pricing for natural perils though. Some generally apply a loading, others only rate this on an individual basis. Atlantic hurricane is the peril which is most regularly incorporated into automated pricing of the hulls of aircraft based at airports deemed exposed to such storms. Severe convective storms (SCS) can cause strong hail and tornadoes and their unpredictability and suddenness makes it very hard for aircraft owners to take evading measures. Most underwriters appear not to price for this risk based on specific location, but consider this exposure in their overall pricing level. The occurrence of the Nashville tornado could raise two questions. Is location specific information for aircraft appropriate to incorporate in the technical pricing of hull insurance? And how to deal with the accumulation of aircraft losses in an event? Identifying the airports which should receive the highest


Graphic: Munich Re

attention for SCS scenarios could be done by the following criteria: • A measure for the degree of SCS exposure by location. This information can be taken from the natural peril models of property (re)insurers. • The number and total sum insured of all aircraft based at an airport as tracked in underwriting systems. • The density of aircraft parked, which the FAA airport database indicates. • Information if the aircraft is hangared and the robustness of the hangars.

loading the historic market burning cost and additional catastrophe scenarios would give an indication for technical pricing.

We modeled the total sums insured for general aviation airports: the colored dots on the map represent the 100 largest airports by total sum insured (TSI). We then overlaid this with SCS rate; the intensity of green indicates the likelihood of occurrence.

Beyond the rating of single risks, managing this exposure at the portfolio level is key. The underwriters queried for this article confirmed that they would not limit themselves in the number and total values at any one location. Obviously due to the movable nature of the risks we insure the base airport can only ever provide a likely scenario of the values exposed in such an event anyway.

The SCS rate can give an indication of the expected frequency of such events, and underwriters should know their total sums insured at locations. The challenge is to model the severity of such events with only a few datapoints to give underwriters guidance to the level of destruction, i.e. an estimate of the probable maximum loss in relation to the total exposure. If underwriters felt that a location specific pricing of SCS exposure was warranted, then for establishing a price


An aside note on hangars: whilst modern hangars are designed to withstand strong winds and should certainly make a difference in the assessment of hail exposure, at John C Tune airport the damage to aircraft was just as bad for the hangared aircraft as it was for those parked on the ramp, irrespective of the quality of the hangar.

Portfolio management

If controlling accumulation through limiting oneself on written exposure is not feasible and if through poor fortune of aircraft being in the wrong spot at the wrong time underwriters may very well end up with higher accumulations than anticipated, then reinsurance is the solution for mitigating the result volatility that stems from these perils. Certainty of retained loss from such an event is achieved by per event excess of loss coverage with a re-

tention calibrated to risk appetite. When considering the right retention level it should also be noted that SCS events are favored by specific weather patterns and thus a correlation between such events can be observed in general and specifically occurred this spring. Next to the tornado at Nashville, airports were also struck in Jonesboro, AK, on March 28th, Monroe, LA, on April 12th, and Walterboro, SC, on April 13th. The assumption that aviation losses happen independently from one another does not apply for such exposures.

out of storm paths at short notice. Airline underwriters are certainly having a close look at this right now. The uncapped aggregate cover provided by airline policies appears in a different light when seeing images of long lines of aircraft parked next to one another on runways.

As a concluding thought it’s worthwhile to note the Atlantic hurricane exposure. This is the peril most underwriters, in particular for light aircraft, do price for explicitly or where they check on large stationary exposures such as spares, museums or aircraft on ground risk coverage in coastal areas. As a more active hurricane season than usual is favored for this season by current oceanic patterns , it may be warranted to validate the assumption that general aviation aircraft can be moved


KIM ROSENLOF - AeroInk Incorporated



n the future, when someone tries to remember where the 2020 AIA Conference was held, the answer could literally be anywhere. For the first time in the organization’s history, the entire conference was broadcast using video conferencing technology, with speakers, attendees, and staff all participating remotely from their homes or offices due to the Covid-19 pandemic. AIA Executive Director Mandie Loroff did an excellent job


at pulling together the online-only conference on such short notice, especially with no major technical glitches during the entire 14 hours of recorded conference. Note that the overview given here is of the 10 educational sessions; coverage of the four keynote speakers will be provided in the Fall 2020 issue of The Binder.

Hot Topics in EU Aviation The conference started out with its usual “hot topics” presentation, given this year by Sybille Rexer and Marco Remiorz, both attorneys at ASD Law in Hamburg, Germany. They provided a European perspective on the Covid-19 effects on aviation, noting German carrier Lufthansa’s first quarter loss of 1.2 billion Euros, a share price lowest since 2009, and the 9 billion Euro bailout package recently approved by the German government, in which the government will take a 20 percent stake in the airline. “Within 65 days, [Lufthansa] went from having record-breaking results for the last three years in a row to ending up in a situation where they said that they [could not] go on without state aid,” said Remiorz. Remiorz also provided statistics from an April 2020 survey by the German Aerospace Industries Association showing that 89 percent of member companies “anticipate far-reaching or existence-threatening effects of the Covid-19 crisis,” and approximately 44 percent of the companies are dependent on state or public-sponsored loan programs. Due to the financial crisis, Remiorz reported the German government has relaxed certain measures related to insurance, including new rules around non-payment of insurance premiums that extend through the end of September. “Insurance companies are temporarily not permitted to either terminate the insurance contract or refuse coverage despite nonpayment of the insurance premium,” said Remiorz. “Insurance premiums are quite an issue because they affect a company’s liquidity and the German government wanted to make sure that the liquidity

stays with the companies, but they don’t lose their insurance coverage.” Remiorz said business shutdown insurance is also a hot topic in Germany since few policies specifically named coronavirus on the list of covered diseases. “We have a couple of lawyers in our office just dealing with business shutdown insurance right now,” said Remiorz. “Coverage is normally provided if an insured business is closed down by an official order to prevent the spread of notifiable diseases within the meaning of the German Infection Protection Act (IfSG). If the insurance contract contains an exclusive list of diseases, insurers often claim that Covid-19 is not mentioned by name and therefore coverage is not to be provided. But if the clause only refers to the respectively applicable version of the IfSG at the time, insurers would probably find it difficult to question the coverage of corona-related restrictions.” Rexer discussed airline passenger compensation requirements as set forth by EU Regulation 261/2004. In effect since 2005, the regulation establishes common rules on compensation of passengers who are denied boarding or affected by long delays or flight cancellations. She noted three cases recently decided in the EU Court of Justice relating to passenger reimbursement. In one case, Moens v Ryanair Ltd, CJEU C-159/18, a passenger sued for additional compensation after a flight was delayed for four hours due to a fuel spill on the runway. The court found for the airline, stating that the runway closure due to fuel spillage could be considered an extraordinary circumstance and the airline not held liable for the delay, as long as the spillage did not originate from an aircraft of the operating carrier in question.


Strangest Claims Panel Eric Weidner, AIA Director-Elect of Claims Division and regional manager at McLarens General Aviation, moderated the “Strangest Claims You’ve Heard of in Aviation” panel consisting of McLarens employees David Gourgues, Trehane Oliver, and John Bayley.

was consistent with saltwater intrusion. The wheels and brakes had sustained the most damage, but the metal bracing was completely corroded in some places. Had the aircraft flown, it could have been a catastrophe.” The insurer honored the claim.

Gourgues discussed a late notice hurricane claim and the technology used to determine whether the claim was legitimate. The owner of a 2012 Arion Lightning single-engine aircraft based in Marathon, Florida, filed a claim for extensive corrosion due to seawater incursion on September 4, 2019—nearly two years after Hurricane Irma hit the Florida Keys on September 10, 2017. “The owner didn’t report the damage until [2019] because he thought the damage was minimal (limited to wheels and brakes)… and was preoccupied with rebuilding his home and business after the hurricane passed,” said Gourgues. “The mechanic said he hadn’t performed an annual inspection in 2018, or he might have discovered the corrosion then.” The McLarens was brought in to investigate the claim and used a variety of sources—including a list of tail numbers taken at the airport just after the hurricane passed, and post-hurricane imagery from the National Oceanic and Atmospheric Agency (NOAA)—to verify that the aircraft had been at Marathon Airport during Hurricane Irma. After the hurricane passed, the airport remained under three to four feet of standing saltwater for several days. “You could see where parts below the saltwater line were highly corroded,” said Gourgues, who noted that the aircraft’s metal structure over which the composite body sat sustained substantial damage. “The damage


Oliver described the hardships incurred by the operator and insurance team when a covered De Havilland Canada Dash 8 twin turboprop commuter suffered a landing gear collapse, subsequent propeller strike, and engine damage at a small Norwegian airport just south of the Arctic Circle. The aircraft had to be moved by sea to a base where it could be repaired. This required 12 days of effort to seal the aircraft against seawater damage and prepare roads for movement from the airport to a barge. “Due to the tides, we had a three-hour window to the move the aircraft, and only one hour of high water available to get the aircraft onto the barge,” said Oliver. Bayley described the trials and tribulations involved with a nose gear collapse in Kaliningrad, Russia. Considerably larger than Oliver’s Dash 8, Bayley’s case involved an Airbus A321 that slid off the runway, affecting the engines, pylons, wing leading edge, and nose gear. He said one of the most important parts of this recovery, which took more than 11 months and necessitated building a $2.3 million hangar at the Russian airport, was not allowing local airport personnel to perform the recovery. “Luckily, having reached the site within 24 hours, we were able to talk to locals about the correct use of slings and obtain a spreader bar [to hoist airframe],” said Bayley. “We have lost count the number of aircraft that have been written off on the basis of people not using spreader bars and squashing the fuselage when trying to recover the aircraft.”

Embracing Data and Emerging Tech Panel Lauren Haertlein, general counsel and director at the General Aviation Manufacturers Association, presented information on technology advances in the urban air mobility (UAM) market during the “Unlocking (Aviation) Industry 4.0 – Embracing Data and Emerging Technology in Aviation Insurance” panel discussion. “The majority of players in this space have an end goal of fully autonomous aircraft in an air taxi model,” said Haertlein. “The impact of these vehicles and operations have the potential to cause disruptively change transportation. Some of the vehicles look really futuristic— and maybe unrealistic—but you’d be surprised to know how many of them are already in flight test.” Haertlein noted that the fledgling UAM industry has the benefit of working closely with government regulators around the world on the frameworks needed to develop autonomous vehicles and integrate them into the airspace. This includes the certification of the products, the operations, the licensing of new kinds of pilots. “We’re having conversations about simplified vehicle operations where the vehicle performs some of the things that were traditionally the skills of the pilot, so the pilot becomes more of a systems monitor and that would change the need for certain types of pilot training,” said Haertlein. Ted Dunlap, senior advisor for the National Transportation Safety Board, talked about new developments in small aircraft. Specifically, he and others from the NTSB visited Embry-Riddle Aeronautical University and Piper Aircraft in Florida in March to fly the Piper M600 with the (now) newly certificated Garmin Autoland system installed. “Autoland is a failsafe button of a different sort than the parachute system found in the Cirrus,” said Dunlap. “It uses airline type of technology. It’s a one button system

– you hit it and it uses GPS and numerous navigation systems onboard to find the nearest airport that it thinks is well suited. It also sends distress signals out to air traffic control and directs the plane to go into a stable approach and land at the nearest airport that it can.” Dunlap remarked on the usefulness of the autoland technology, which worked flawlessly during his demo flights. “One of the crashes we see all too frequently is flight into inadvertent IMC [instrument meteorological conditions],” said Dunlap. “[The pilot] can’t see where they’re going, they get disoriented, and they crash… I think this was designed for if the pilot was incapacitated, the passenger could hit the Autoland button and get down safely, but also if someone was a visual rules pilot and got into instrument conditions, and as long as they have altitude, the plane would land itself.” The panel also discussed the spreading criminalization of pilots, aviation personnel, and manufacturers following an accident. “The risk of criminalization is expanding into manufacturer liability because we are responsible for the safety of our products,” said Haertlein. “Here in the U.S., the safety focus takes precedence, and there can be a real hesitancy by the pilot population and manufacturers to make data open and public when there is a tendency toward looking at something as criminal wrongdoing rather than just an error.” “The scariest thing to me is the corporate manslaughter scheme that we see in other countries and we’re starting to see it in the U.S. as well,” said Sherry Ortiz. “That’s always a scary thing to think about for manufacturers… and it turns a really amazing system of data sharing and a positive safety culture into a system where people are reluctant to share information. Plaintiffs are getting a lot more savvy about obtaining deaggregated data and knowing what to do with it, and we all need to know that.”


Air Show Coverage Susan Amey, agent at Kimmel Aviation Insurance Agency, discussed airshow coverage and exposures, noting that commercial general liability policies need to include all dates before and after the event that would include any setup and tear down of the facilities. Additional insureds usually include the airport owner, any FBOs, sponsors, and property owners. Airshow participants, including airshow performers and aircraft ride operators, should not be added as additional insureds as they

While event coordinators would want to obtain certificates of insurance from all participants, performers and vendors, Amey suggested that events not forget about their volunteers. Determine whether volunteers are included as insured on the event policy and whether they are required to sign waivers or attend briefings and debriefings. Accident coverage is also available for volunteers.

should obtain and present their own certificate of insurance.

Amey noted that the Covid-19 pandemic has created uncertainty in the airshow circuit, with many airshows now canceled through October 2020 and some entities turning to innovative solutions such as drive-in and online airshows.

Exclusions may include autos on premises, product liability for sales of food or souvenirs, grandstands and bleachers, liquor liability, explosives liability, and aircraft rides. If the insured will have any aircraft in their care, custody or control, a hangarkeeper legal liability policy is required.


Inadvertent Foam Discharges in Aircraft Hangars A panel of aviation industry specialists discussed the risks of foam fire suppression systems in aircraft hangars and recommended changes in fire code requirements based on the number of—and damage caused by—inadvertent foam discharges versus the far fewer actual hangar fires suppressed by such systems. Nicholas Methven, senior vice president at Global Aerospace, remarked that since 2007 the company has paid out $12 million in damages from about 53 quota-sharing claims involving inadvertent foam discharges in hangars, the actual damages of which totaled more than $40 million. He cited inadvertent discharges from system malfunctions, lack of maintenance, improper installation, and human events such as holding a barbeque in the hangar bay. “We see far too many inadvertent foam suppression discharge events relative to what I’ll call fire-induced discharge events,” said Methven. “If we go to the 1980s, we don’t see any fire-induced discharges in our data. They are all inadvertent discharges.” The main purpose of a foam-based fire suppression system is to quickly blanket the entire hangar to cool the flame, suppress vapors, smother the fire, and prevent combustible fuel from igniting. The foam can be deadly to persons caught in an inadvertent discharge, and at minimum damage the electrical and mechanical systems of aircraft and engines enveloped in the foam.

Douglas Fisher, Fire Protection Engineer and Principal at Fisher Engineering, Inc., noted that the costs to install and maintain foam fire suppression systems are “staggering when compared to the losses saved.” “You’re looking at more than $1 million to install one of these systems, and $10,000 to $50,000 per year to maintain them,” Fisher said. “Compare that to the lack of there ever being a fire where the system needs to go off, and how many inadvertent discharges there are.” Megan Eisenstein, Director of Regulatory Affairs at the National Air Transportation Association (NATA), presented figures from a University of Maryland study of 174 foam discharges in hangars around the world. This study showed 137 accidental foam discharges, or one every week since 2004, zero fuel spill fires, and 3.7 times more foam system discharged without fires versus those with fire. Based on all of this data, the National Air Transportation Association (NATA) is currently leading the charge to change the National Fire Protection Association’s Standard 409 on Aircraft Hangars. While not a regulatory document in itself, many state and municipal building codes defer to NFPA 409 to require foam fire suppression systems in hangars of a certain size and construction. The association has posted NFPA 409 information at its website, and has launched a petition that can be signed online at


Sales and Marketing in Aviation Insurance Three insurance company owners and a USAIG vice president composed a panel regarding sales and marketing in aviation insurance. The panel provided a general overview of how sales and marketing has changed over the past few decades—especially with the advent of apps and social media, plus tactics to either take or avoid. Matt White, owner of BWI Aviation Insurance and iFlyQuote, discussed what he calls, “the Amazon effect” in which an ever increasing number of consumers are searching for and buying goods and services online. “Everything has changed over the past 10-20 years; the way we shop, get information and make decisions,” White said. “The Covid-19 shutdowns over the past few months have accelerated this trend, and it’s no different for aviation insurance. More people are going to search and find their broker online. The future of aviation insurance marketing is online advertising.” White provided a list of five actions every agent/broker should take to bring in new business: 1. Create and update all free marketing pages including business listings on Google maps, Apple maps, Yelp, Facebook, Linkedin and others 2. Calculate average premium and lifetime value per customer to help set a marketing budget and make marketing decisions 3. Create a Google AdWords account and hire a professional to manage that account for a minimum of six months (White called AdWords “the most important 21st century marketing tool available”) 4. Create an email marketing list and send out a quarterly email newsletter


5. Add a popup to your website to prompt visitors to sign-up for your email list USAIG senior vice president Vic D’Avanzo discussed licensing requirements, noting that soliciting and selling insurance online can be problematic if the agent or broker is not licensed properly. “Generally you need a license in a state before quoting insurance in that state,” said D’Avanzo. “Sometimes we need to remind people that the state you need a license for is not that state where your office is located, but is the state of the insured’s physical address.” D’Avanzo cited an example where a broker not licensed in the insured’s state helped out a fellow broker and was fined for the act. He noted that most states require the agency itself to be licensed in that state as well as the broker. Tim Bonnell Jr., CAIP, CIC, owner of Aeris Insurance Solutions, discussed state laws that look upon rebating as an unfair trade practice, noting that rebating is prohibited by 48 of the 50 U.S. states (California and Florida allows forms of rebates with caveats). If not specified in the contract, offering rebates of premiums payable on the policy, special favors or advantages in the dividends or other benefits, or any valuable consideration or inducement not specified in the policy may be illegal under state law. “Saying something like, ‘if you do business with us, we’ll cut our commission 10 percent’ or ‘if you do business with us, we’ll take you and three of your friends to the Super Bowl,’ could be construed as rebating,” said Bonnell. “Ultimately you need to know what the rules are in the state you’re working in.”

Part 91 Dry Leasing – David Norton Attorney and partner at Shackelford Bowen McKinley & Norton, David Norton gave a presentation on Part 91 Dry Leasing, which was immediately followed up with a panel discussion on illegal charters, the two topics going hand-in-hand. According to Norton, a wet lease is defined as the “aircraft plus crewmember,” and a “dry” lease as a mere equipment lease of the aircraft. Some aircraft owners, shying away from key legal, logistical and cost differences between Part 91 and Part 135 operations, enter into dry leasing agreements seeking to raise revenue with their aircraft while letting others operate the aircraft. If not done properly, Part 91 dry leasing can result in penalties from the FAA and refusal of insurance coverage when an incident occurs. The key question is whether operational control is transferred or if an air transportation service is actually being provided. Norton says that “operational control” continues to be a confusing term among owners and pilots, but essentially boils down to who gets to say where an airplane is going on a given day. “Pilots will say they have operational control, but unless they are the aircraft owner or the aircraft is leased to them personally, pilots are generally not in operational control of the airplane,” said Norton. “The operator is generally a company or person who has the right to say where [the aircraft] is going on a given day, and for [business jets] that means you’re usually hiring a professional pilot. So it’s not necessarily the person whose hands are on the yoke acting as the operator.” Appropriate uses of dry leases include flying clubs, flight department companies (although these can be denoted as illegal for other reasons), and occasional third-party use. Dry leasing programs and “holding out” aircraft from Part 135 certificates are examples of inappropriate uses of dry leases. Business use exceptions include demo flights, personal use without compensation, affiliates and joint ventures,

time sharing, joint registered ownership, and interchange. Norton said there are a few narrow exceptions in the FARs for Part 91 operators to receive compensation for flights: carriage of candidates in federal, state or local elections (FAR 91.321), and a few situations detailed in FAR 91.501, including demo flights, carrying property other than mail, and time sharing, interchange and joint ownership agreements. “The exception that I use the most is time sharing,” said Norton. “It’s a great tool for income tax reporting management. If I want to let an employee of the company have access to the airplane and [collect] some reimbursement to help manage my income tax, I can do that.” It’s FAR 91.501(b)(5) where many business aircraft owners get tripped up by well-meaning tax attorneys and accountants who advise their clients to place an aircraft into a limited liability company (LLC) as the LLC’s sole asset. Known as a “flight department company,” this arrangement can be illegal under FAR 91.501 if the owner of the LLC also operates the aircraft, since the regulation allows carriage of company personnel and guests only if the flight is incidental to the business of the company owning the aircraft. “To be a legal Part 91 operator, you have to be a company whose major enterprise for profit—more than 50 percent of its cash flow—must have nothing to do with airplanes,” said Norton. Norton said that flight department companies can be used to own aircraft that are then leased to individuals. “If I have two people that want to join in the ownership of a $2 million airplane but they can each only afford a $1 million airplane, I can use a holding company that the two individuals own, that company can act as the lessor and I can do leases to those two individuals. As long as I’ve set that up correctly and those people accept operational control of the aircraft, it’s copacetic.”


Illegal Charter The discussion of illegal charter—essentially Part 91 aircraft owners renting out their aircraft without the overhead of a Part 135 certificate or a legal lease to a Part 135 certificate holder—may be apropos in today’s Covid-19 climate where thousands of aircraft sit mostly idle due to stay at home orders, while charter demand is likely to increase as airlines struggle with fewer routes. As senior vice president of the National Air Transportation Association (NATA), Ryan Waguespack has been involved in the organization’s Illegal Charter Task Force formed in June 2018. He characterized the types of illegal charter as “the careless, the clueless and the criminal.” “The clueless is the guy going out to look for a charter quote and a buddy says he knows someone with an aircraft and why not just lease the aircraft for an hour or so,” Waguespack said. “The careless is the guy who gets into a dry lease or illegal charter situation, kind of knowing something isn’t right, but goes forward anyway. And then you have the criminals who knowingly market illegal services. Unfortunately, we’ve seen some Part 135 operators do this; you can’t hold one Part 135 certificate with two aircraft on it and then hold aircraft under Part 91 and charter those off.” To help combat illegal charter, the NATA created an online search tool to help consumers, pilots, and aircraft owners determine whether a specific aircraft is registered on a Part 135 certificate. Located at avoidillegalcharter. com, the “Lookup Charter Operator” feature allows anyone to enter a charter operator’s name and/or an aircraft tail number into a webpage that will then search a set of nine cross-linked FAA databases to provide information on the corresponding Part 135 certificate holder. Users who suspect illegal charter is occurring can submit an anonymous report or call the Air Charter Safety Foundation’s hotline at 1-888-759-3581.


From the insurance standpoint, an illegal charter operation can have unintended consequences if there is an accident. “Any claims organization is going to review the policy language for adherence to the terms and conditions” said Jeff Sheets, vice president and general claims manager at AIG Aerospace. “They are going to look at the aviation policy and the purpose of the flight, and then say, ‘Is this a commercial flight or business and pleasure operation?’ And you really have to have it right because they’re going to review for any restrictive language such as definitions, exclusions, and insuring agreements.” Jeff Sheets says the blanket pilot warranty—basically covering any pilot approved by the chief pilot to fly the airplane—is changing and the wording is becoming more specific in terms of pilot qualifications and history, ensuring pilots are meeting the basic minimums. “The underwriters have always looked at dry leases seriously,” said Sheets. “They’re making sure they know who’s flying their airplanes, who’s in the back seat, and that the owners and operators of these aircraft know who are in these aircraft and where the exposure is, because that’s the risk transfer they’re trying to accomplish. In some instances, they haven’t effectively moved the risk and they’ve accepted more than they are probably even aware of.” Chris Fostiak, vice president of Hays Companies, agreed. “Underwriting has been placing more scrutiny on crew and once operational controls release from the lessor— let’s say a non-exclusive dry lease—pilots from the lessor standpoint almost don’t matter. It’s the lessee’s pilots now flying the airplane. If the insurance policy is staying with the lessor, and you have the lessor and lessee both using the airplane, now you’ve got a mutual indemnification clause drafted between each party, how is insurance going to respond contractually to make sure that the other sides’ pilots are covered while they’re exercising operational control of the aircraft.”

“They are going to look at the aviation policy and the purpose of the flight, and then say, ‘is this a commercial flight or business and pleasure operation?’ And you really have to have it right because they’re going to review for any restrictive language such as definitions, exclusions, and insuring agreements.”


3D Printing in Aviation Manufacturing A panel that included Lisa Savitt, partner in The Axelrod Firm; GAMA representative Lauren Haertlein; Lili Beneda Rubenstein of AIG Aerospace; and Mike Gordon, director of process engineering at Piper Aircraft; discussed 3D printing, more formally known as additive manufacturing (AM). Savitt outlined benefits of AM, including more design freedom resulting in fabricating complex parts more efficiently. She showed a video clip from General Electric where a single new AM part can take the place of an assembly consisting of more than 300 parts. Heartlein discussed the FAA regulations relating to AM, noting that while there are no real regulations against AM parts since the FAA approves the parts and not the process or standalone materials, “It’s been widely recognized that the aviation industry is regulated to a degree not comparable to any other, and hence few AM parts have actually received FAA approval.” She quoted FAA Part 23 Airworthiness Standards for Normal Category (small) Airplanes that squarely puts the onus on the part manufacturer: “An applicant must determine the suitability and durability of materials used for parts. Methods and processes for fabrication and assembly used must produce consistently sound structures.” Gordon said one of the reasons manufacturers want to use AM is to lower the cost of aircraft parts and repairs. As an example, he showed a thermoformed plastic air


conditioning assembly that takes 12 tools and 31 operations to fabricate costing $169. The AM variant uses an optimized design for improved airflow and can be 3D printed for $7.50. “The savings is significant, up to 95 percent savings,” said Gordon. “And the part itself has been demonstrated through compliance with the regulations to show that the materials and the processes meet or exceed that which was previously accepted.” Unfortunately, the appeal of such significant savings can lure aircraft owners into purchasing unapproved aftermarket parts that may compromise the safety of their aircraft. The availability of low-cost 3D printers allows unscrupulous enterprises to copy small aircraft parts and sell them at great profit while still undercutting the OEM’s certified part’s price. These suspected unapproved parts (SUPs) often look nearly identical to the original part but may lack specific material or physical characteristics. Rubenstein cited the insurance implications of AM parts, including commercial general liability, product liability, errors and omissions, cyber, and business interruption coverage. “With cyber policies you can cover data breaches that wouldn’t be covered under other policies,” said Rubenstein. “For example, if someone introduced covert flaws into the process of AM, that would be covered under a cyber policy.”

Data at a Distance: The Art of Remote Inspections Engineering Systems Inc (ESi) provided a lively and engaging presentation about the technology available to conduct inspections that could be attended remotely by multiple stakeholders in accident investigation or litigation teams. Using drones and multiple cameras in the field and connected laboratories filled with a variety of cameras and inspection tools allows the ESi team to provide video documentation of just about anything clients want to see, and recordings can be stored behind encrypted passwords and viewed on demand.

valve.” The ESi team can also scan, build, and store 3D models of an accident site, allowing investigators or litigators to virtually explore the site months or years after the accident occurred as if the accident happened that day.

“Remote access provides a lot of efficiencies because you don’t need to travel to partake in the inspection,” said Matt Kenner, director of aviation at ESi. “A whole room can be filled with stakeholders and everyone sees the same thing. There’s not much difference between the remote view and being there live.”

Depending on access to the accident site, the team can also take 3D images over successive days, “so not only can you see the site in 3D later on, but you can also see how it changed over time,” Fox said.

“We can set up a multi-user virtual reality lab where we can have lots of people in the space via head-mounted VR units,” said Fox. “They can interact with each other and with the 3D model.”

The photos and video taken in the laboratory can be uploaded in near time and accessed through a secure portal that looks a lot like a normal website. Measurements taken in real time at the lab can be witnessed by parties in multiple locations, with the video recorded and stored for on demand viewing. Charles Fox, Ph.D., ESi director of technical services, showed a CT X-ray camera that can be used to inspect the interior of a part to determine whether the part was operational before an aircraft crash. “We had a deicing valve that had been alleged to be nonfunctional,” said Fox. “We were able to show from the CT scan that the valve was functioning properly before anyone did any cutting into the




Corky Nason

This article was prepared several months ago. Unfortunately, Corky Nason passed away on July 9 from a non-covid respiratory illness that overtook him rather quickly. His family is very grateful to the AIA for all it meant to Corky during the last 40 years.


ourtney H. “Corky” Nason served the AIA and our aviation insurance industry as a broker for most of his career. His longevity with the AIA dates back to its very beginning as the AIAI – Association of Independent Aviation Insurers. In the early 1960s, after completing his service as engineering officer on a destroyer in the Navy, Corky found his way to the offices of Mann Klein and Fairfax Underwriters in Kansas City, where he dove into the world of surplus lines and Lloyd’s contracts. He moved with the business to


Marsh and McLennan, then to Crumm and Forster, and eventually out on his own to form Nason Associates, Inc. When Corky first came to the AIAI, there some members of the industry who balked at joining. The group had a reputation as a party club, and the antitrust litigation from the 1950s left lingering concerns among insurers about cooperative efforts, even at a social level. Corky pushed hard to establish education programming and to secure accreditation for Continuing Insurance Education. Those programs and others added since have become the backbone of the AIA. He was instrumental in establishing the AIA’s CAIP designation for Certified Aviation Insurance Professionals. He also served as one of the founders of the AIA Education Foundation, persuading members to make contributions to promote educational and scholarship initiatives to this day. Not only that, but he led the establishment of the AIA’s highest honor, the Pinnacle Award. While not a golfer, Corky and others played in an annual AIA tennis tournament for many years. He has continued playing tennis well into his retirement. Corky’s first airplane was a Cessna 172 he bought with three friends for $2,700 in 1969. He has since owned others, including a Turbo Arrow and a Seneca III. He loved them all and flew whenever he could, in support of work and play. About 10 years ago, Corky implemented a succession plan, and he gradually sold his business to his key employees, Linda Joy, Lorri Shuey and Cindy Peck, who own and operate Nason Associates today. They also have carried the CIE program for the AIA every years since, for which we cannot thank them enough.


Corky’s most recent appearance with the AIA was the 2018 conference in Austin, TX, and he holds the AIA close to his heart. As a Past President and a Pinnacle Award honoree himself, he has seen every side of the AIA’s growth and development over the years. Today he is happily retired and living at his longtime home at Lake Quivira near Kansas City. His great loves in life have been his wife Phyllis, his Turbo Arrow, his children and grandchildren, his Volkswagen convertible, and the AIA. Corky and Phyllis have many, many happy memories of their dear friends at the AIA and all the marvelous places they visited. Corky we salute you and Phyllis both, we think of you fondly, and we wish you the very best.





hope this finds everyone well and safe during these challenging times.

try leaders from AOPA, HAI, the NTSB and others were eager to assist and present.

The strength of any organization comes from the talents and focus of its individual members. Their common interest and collective support form the underpinnings of the association. In the case of the AIA this was never more clearly illustrated than in the manner in which the association came together following the unfortunate but necessary cancellation of our annual conference.

The “virtual conference” presented online has been a resounding success due in no small part to the hard work of AIA staff and the willing participation and support from the membership. The association continues to bring value to the membership through the “Company Close-Ups” provided online which allow members to engage with underwriters in a virtual version of the popular “Queuing Up” conference event. In addition to the virtual conference your AIA has continued to be the “voice of the industry” with key players and stakeholders outside aviation insurance. AIA leadership has presented and participated in panel discussions with AOPA, Embry-Riddle, GAMA, HAI and others.

Individual members and their respective companies came together in unprecedented support of the association proving not only the value of the organization, but also the resiliency of the industry as a whole. Despite the challenges presented by the pandemic, the association moved forward with valuable CIE and CLE offerings, and gathered an impressive list of industry keynote speakers to present on topics of member interest. The value and voice of AIA was clearly recognized and indus-

As we move forward in the “new normal” of reduced business travel and logical social distancing, AIA provides networking and connection value. The Members Contact List on the website and vir-



tual social gatherings enable members to establish and maintain those vital connections which form the basis of all business relationships. The AIA website’s “members only” section provides links to past presentations, online, aviation-specific CE and much more. AIA is also currently developing an Aircraft Training Provider database. When launched it will provide important information on where pilots and operators can access the training needed to keep them safe and compliant. Any discussion on the value of membership should include the important initiatives AIA has in place to engage the next generation of aviation insurance professionals. Our Young Professionals group offers opportunities for mentoring and networking with established industry leaders and a forum for information sharing amongst peers. Not to mention inspiring and sharing the vision and energy of the group. And the AIA Women’s Initiative provides the opportunity for women to share experience and knowledge in a forum to support and promote their engagement and development in the industry.

With a membership totaling just under 700 members, the AIA is the recognized voice of our industry. But we need your help and support in growing that figure to over 1,000 in in the next few years. You can help first by maintaining your current membership. You can also help by encouraging your co-workers and colleagues to join AIA. Finally, those of you in leadership positions can further assist us while making a solid investment in your organizations by encouraging and supporting your respective staffs’ AIA membership. And the by telling your company’s story via advertising in the only specialized quarterly aviation-insurance magazine – The Binder. Ultimately the work of the AIA on many fronts will continue to provide you, our members, with constant value - not just at conference time but throughout the year. In this endeavor we deeply appreciate your consistent support through your continued and sustaining membership.



Women’s Initiative Report Spring 2020


t’s still hard to believe that how the world has changed in just a period of a few months. The Annual Conference is a time for us to enjoy each other’s company, learn from our industry leaders, and conduct important meetings with our clients and colleagues. While we were not able to come together in Tucson this year, the AIA’s virtual conference, the Tuesday Happy Hours, and the dozens of Zoom meetings that we have all probably attended over the last couple of months, have been enlightening to say the least. We have learned that through technology, we can stay connected to one another. One thing I do know, we are going to have an amazing conference in New Orleans for 2021. I hope to see everyone there!


Leading up to the Annual Conference, we had planned a survey to go out to our members concerning interests in programming, networking, and our mentor program. We halted the survey once the decision was made to cancel the conference. Due to the recent events, we have re-thought the survey and come up with new and innovative ideas that we want to pose to our group. If you have any thoughts or ideas that you would like to add that are not covered by the survey, please reach out to me or Mandie directly. Our goal is to provide a worthwhile opportunity for networking and growth. We are working hard to find a time to meet at the Annual Conference that does not conflict with the

Saturday morning golf tournament or clay shooting event. While the schedule is fairly tight, we believe it is important that our group not have to forgo golf or shooting to attend our event. We are considering moving our meeting to a Happy Hour time period on Sunday of the conference, early enough to not interfere with dinner plans that you may have. We will either have a social gathering only or have a short program with networking following. Please let us know your preferences in the survey. As many of you know, we are working on a mentoring program for the Annual Conference as well. A first-time attendee will be paired with an AIA veteran for the weekend. Our hope is that the mentor will help answer questions, be a familiar face in the

crowd, and help make introductions and connections so that our first-timers feel welcomed and engaged. Last but not least, I would like to start a Spotlight in Aviation article in the Binder. Each article would highlight one of our member’s work in aviation. If you are interested in helping with programming and events, the mentoring program, or The Binder article for the Women’s Initiative, please reach out to me directly at While our group is new, we are excited to be planning for the future and creating more connections within AIA. Thank you all for your support.



Now More than Ever Safety Standards Are Needed on the Ground and In the Air Updates from IS-BAO, IS-BAH, and the new NATA

Safety 1st Clean ROBERT LITTLE - President, Air Safety Dynamics


usiness Aviation, like every other industry right now, has an added Covid-19 twist to it that needs to be incorporated into our day to day operations. As many resources are being developed to guide the aviation industry through these new challenges, it is essential that safety policies and procedures are integrated into our daily tasks, on the ground or in the air, to mitigate the coronavirus threat. The International Standard for Business Aircraft Operations (IS-BAO™), the International Standard for Business Aircraft Handling (IS-BAH™), and the National Air Transportation Association (NATA) Safety 1st program provide valuable safety standards systems and training programs to the business aviation industry. Each has continued to


support operations and ground handling businesses with guidance, new programs, and virtual solutions during the global pandemic. Safety standards based on ICAO Standards and Recommended Practices are at the core of the International Business Aviation Council’s (IBAC) safety programs, IS-BAO and IS-BAH. Introduced in 2002, the IS-BAO was the first globally recognized voluntary safety standard for business aircraft operators. Since then, thousands of operators from around the world have navigated through the six-step process to registration. Most of these operators have continued to advance through Stage 1 and 2, and many on to the Stage 3 achievement that acknowledges their integrated safety culture is sustained. As an effective risk assessment tool,

IS-BAO is used by several civil aviation authorities around the world.

validations every 6 months after the initial registration.

Recent IS-BAO policy adjustments have been made to address the Covid-19 impact, including choosing a remote virtual audit and attending workshops in an online webinar format. IS-BAO has also continued to expand by introducing several new initiatives to streamline the safety program for business aircraft operators. Recently, an all-inclusive support option was added for first-time registrants, called FlightPlan Stage 1. Small operators with tight resources can achieve the same quality IS-BAO system with FlightPlan Stage 1 that larger flight operations experience. This program incorporates a certified implementor for support and special credentialed auditors, along with “On Course�

In addition to the new entrant option, there has been an advanced Progressive Stage 3 program developed specifically for Stage 3 IS-BAO participants with a mature SMS that are looking for more ways for continuous improvement via benchmarking leadership options and a communal de-identified safety database. These new IS-BAO options provide paths to further develop a safety culture for business aviation operators that is especially valuable in these unprecedented times. Ground handling losses are a continuing problem in our industry. A recent National Business Aviation Association (NBAA) Safety Committee

Survey showed a total of 48 percent of respondents reported having one to three ground handling incidents or close calls in the last three years, while 8 percent reported having four to nine incidents or close calls. Ground handling remains a top priority for the NBAA Safety Committee. In response to this problem, the International Standard for Business Aircraft Handling (IS-BAH™) was jointly developed in 2014 by IBAC and NATA and incorporated the Safety 1st Ground Audit Program. IS-BAH also utilized the same structure and SMS core principles as IS-BAO. Well received by a wide variety of global business and general aviation ground handling service providers, the IS-BAH standards and recommended practices use a proactive approach to managing workplace safety to prevent hangar rash incidents, workplace injuries, and more. The IS-BAH recognizes that finding and fixing hazards and associated risks before they result in losses is a far more effective approach, so “luck” no longer plays such a significant role in airside activities as it may have previously. The International Civil Aviation Organization (ICAO) Annex 19 on Safety Management Systems (SMS) requires States (national authorities), as part of their oversight of “service providers” (including commercial aircraft operators, aerodromes and international general aviation operators of large or turbojet airplanes), to implement an SMS. This SMS component allows an IS-BAH registered handler to gain recognition for having a well-founded safety management development process in place. As a reliable benchmark against which performance can be judged as meeting or exceeding the customer’s expectations, IS-BAH also helps heighten awareness of safety issues among employees.



Like IS-BAO, IS-BAH is offering a remote virtual audit option through 2020 and provides its required workshops online in a webinar format to accommodate the COVID-19 restrictions. Both the IS-BAH and the NATA have developed new Covid-19 guidance materials for ground handlers and FBOs to use as they take on the additional tasks to provide a safe environment.

NATA first introduced its Safety 1st training program in 2008 as a way of shifting the focus of a safety training program from simple compliance to true employee learning and development. As a provider of standardized training and support, NATA Safety 1st is the leading resource for preparing individuals to safely handle general and business aviation aircraft. With over 1,600 locations participating in Safety 1st, NATA is driving global safety enhancements. With the recent release of Safety 1st Clean, NATA is continuing to empower the industry in response to the pandemic. It was developed to provide general guidance on facility cleaning, disinfecting, and facility operations. The goal of this standard is to safeguard FBO team members, clients, corporate assets, and the general public. The Safety 1st Clean standard represents industry best practices and government agency guidance and provides a self-certification process that allows FBOs to highlight their conformance by displaying the Safety 1st Clean logo at their facility. Access to this new program can be found at the website or email for more details.

The IS-BAH team recently introduced a guidance document assembled with steps and directions on how to stay COVID-19 secure and provide a safe work environment for employees and guests as we begin to return to business. The document is a compilation of global agency recommendations and best practices and can be found on the IBAC. org website under IS-BAH resources “Toward Covid-19 Secure”.


The majority of Safety 1st participants have taken this time to reinvest in safe operations via our training platforms, educational webinars, new podcast series, adoption of operational best practices, and outreach – this is a win for all industry stakeholders. Now more than ever, our vigilant focus on safety best practices is vital to the future of business aviation, and it will help take us through these challenging times and into the new normal.


BELINDA BRYCE - AIA International Director-At-Large



feel very privileged to be the newest member of the AIA Board as an International Director at Large (and a cheerleader for all things Canadian). It’s certainly been an interesting second quarter as we navigate our new reality of living and working amidst a Global Pandemic. In September 2018 the AIA held its first “In Canada – For Canada” regional reception event at the Omni King Edward Hotel in Toronto. The event provided a great opportunity for Canadian aviation insurance professionals to hear from industry speakers and network with other members. Building on the success of that event and in response to the needs of our growing Canadian membership, the AIA moved to host a Canadian regional event on opposite years of the popular London-based reception.

gional event” which has the added bonus of allowing us to reach all Canadian members from coast to coast. This online program will provide Canadian AIA members with an aviation-specific continuing education opportunity as well as online access to the CAIP Core Principal capstone course. We are working on compiling a distinguished panel of Canadian-focused keynote speakers including representatives from both government and industry and welcome your feedback. While details are still being arranged, the online event is tentatively set for mid-September. Watch for additional information in the weeks to come. In the meantime, stay safe and stay healthy.

(Belinda Bryce of The Magnes Group is AIA’s newest International Director at Large. A well-known industry professional

Of course, in addition to curtailing the all-important NHL season, the challenges of the pandemic will force us to forgo an onsite event for 2020. We’re pleased however to advise that plans are underway to host the first ever Canadian “virtual re-


with years of aviation insurance experience, Belinda will be spearheading AIA’s efforts to deliver not only a great online regional event, but ensure the needs of Canadian AIA members are heard at the board level.)

PRESIDENT JIM GARDNER The James A. Gardner Company, Inc.



TREASURER LUKE UITHOVEN Kimmel Aviation Insurance Agency, Inc













AIA BOARD COUNSEL RAY MARIANI Leader, Berkon, Colao and Silverstein LLP