insurer, which alone or in combination provides the minimum coverage prescribed in § 208.11. When more than one insurer is involved in providing the minimum coverage prescribed herein, the limits and types of liability assumed by each insurer shall be clearly stated in the certificate of insurance.

(b) The insurance coverage and certificate required by this part shall be obtained from a reputable and financially responsible insurance company or association which is legally authorized to issue aircraft liability policies in one or more States of the United States or in the District of Columbia.

§ 208.11 Minimum limits of liability.

(a) The minimum limits of liability insurance coverage maintained by a supplemental air carrier shall be as follows:

(1) Liability for bodily injury to or death of aircraft passengers: A limit for any one passenger of at least $75,000, and a limit for each occurrence in any one aircraft of at least an amount equal to the sum produced by multiplying $75,000 by 75 percent of the total number of passenger seats installed in the aircraft.

(2) Liability for bodily injury to or death of persons (excluding passengers): A limit of at least $75,000 for any one person in any one occurrence, and a limit of at least $500,000 for each occurrence.

(3) Liability for loss of or damage to property: A limit of at least $500,000 for each occurrence.

(b) Notwithstanding the provisions of paragraph (a) of this section, a supplemental air carrier may be insured for a single limit of liability for each occurrence. In that event, coverage must be equal to or greater than the combined required minimums for bodily injury, property damage, and/or passenger liability for the type of use to which such aircraft is put, as the case may be.1

(c) In the case of a single limit of liability, aircraft may be insured by a combination of primary and excess poli

1 For example: The minimum single limit of liability acceptable for an aircraft in passenger service with 60 passenger seats would be computed on the basis of limits set forth in paragraph (a) as follows: 60X0.75 equals 45; 45 $75,000 equals $3,375,000; $3,375,000 plus $500,000 (nonpassenger liability per occurrence), plus $500,000 (property damage per occurrence) equals $4,375,000. The latter would be the minimum amount in which a single limit liability policy may be written based upon the above assumptions.

cies. Such policies must have combined coverage equal to or greater than the required minimums for bodily injury to nonpassengers, property damage, and/or passenger liability for the type of use to which the aircraft is put, as the case may be.

§ 208.12

Terms and conditions of insurance coverage.

With respect to insurance required by this part:

(a) Insurance contracts shall provide for payment by the insurer on behalf of the insured supplemental air carrier, within the specified limits of liability, of all sums which the insured carrier shall become legally obligated to pay as damages for bodily injury to or death of any person, or for loss of or damage to property of others, resulting from the negligent operation, maintenance or use of aircraft in air transportation by the insured carrier.

(b) The liability of the insurer shall apply to all operations by the insured carrier in air transportation. The liability of the insurer shall not be subject to any exclusion by virtue of violations, by the insured carrier, of any applicable safety or economic provision of the Federal Aviation Act of 1958, as amended, or of any applicable safety or economic rule, regulation, order, or other legally imposed requirement prescribed thereunder by the Federal Aviation Administration or the Civil Aeronautics Board, respectively.

(c) The liability of the insurer shall not be contingent upon the financial condition, solvency, or freedom from bankruptcy of the insured. The limits of the insurer's liability for the amounts prescribed herein shall apply separately to each occurrence, and any payment made under the policy because of any one occurrence shall not reduce the liability of the insurer for payment of other damages resulting from any

Occurrence.

other

(d) Within the limits of liability herein prescribed, the insurer shall not be relieved from liability by any condition in the policy or any endorsement thereon, or violation thereof by the insured air carrier, other than the exclusions set forth in § 208.13, or such other exclusions as may be individually approved by the Board. Cancellation of an approved policy shall be effected only upon written notice to the Board, in accordance with § 208.14(d).

(e) Except for the geographical exclusions authorized in § 208.13 (g) and (h), the coverage shall be worldwide. For good cause shown, however, the Board may waive this requirement or amend the certificate or other operating authority to describe the geographical areas actually served by the supplemental air carrier. Authority for any general restriction (e.g., North American Continent, Western Hemisphere, etc.) shall be recited in any endorsement containing a general restriction.

§ 208.13 Authorized exclusions of liability.

Unless other exclusions are individually approved by the Board, no policy or certificate of insurance required by this part shall contain any exclusion other than the following authorized exclusions: The insurance afforded under this policy shall not apply to:

(a) Any loss against which the named insured has other valid and collectible insurance, except that the limits of liability provided under this policy shall be excess of the limits provided by such other valid and collectible insurance up to the limits certified in a Certificate of Insurance issued to the Civil Aeronautics Board in Washington, D.C., but in no event exceeding the limits of liability expressed elsewhere in this policy.

(b) Any loss arising from the ownership, maintenance, or use of any aircraft not declared to the insurer in accordance with the terms and conditions of this policy;

(c) Liability assumed by the named insured under any contract or agreement, unless such liability would have attached to the insured even in the absence of such contract or agreement: Provided, however, That this exclusion shall not apply to the named insured's waiver of liability limitations under the Warsaw Convention by signing a counterpart to the agreement of carriers (Agreement CAB 18900), as approved by Board Order E-23680, May 13, 1966, agreeing to a minimum liability for injury or death of passengers of $75,000 per passenger, or any amendment or amendments to such agreement which may be approved by the Board and to which the named insured becomes a party.

(d) Bodily injury, sickness, disease, mental anguish, or death of any employee of the named insured while engaged in the duties of his employment,

58-060-76- -4

or any obligation for which the named insured or any company as his insurer may be held liable under any workmen's compensation or occupational disease

law;

(e) Loss of or damage to property owned, rented, occupied, or used by, or in the care, custody, or control of the named insured, or carried in or on any aircraft with respect to which the insurance afforded by this policy applies;

(f) Personal injuries or death, or damage to or destruction of property, caused directly or indirectly, by hostile or warlike action, including action in hindering, combating, or defending against an actual impending or expected attack by any government or sovereign power, de jure or de facto, or military, naval, or air forces, or by an agent of such government, power, authority, or forces; the discharge, explosion, or use of any weapon of war employing atomic fission or atomic fusion, or radio-active materials; insurrection, rebellion, revolution, civil war, or usurped power, including any action in hindering, combating, or defending against such an occurrence; or confiscation by any government or public authority.

(g) Any loss arising from operations by the named insured within any country of the Sino-Soviet bloc or Cuba: Provided, That a loss caused by mere misadventure in flying over or landing in such territory shall not be excluded. The "Sino-Soviet bloc" is defined to include Lithuania, Latvia, Estonia, Czechoslovakia, Bulgaria, Rumania, Hungary, Poland, Albania, East Germany (Soviet zone of Germany and Soviet sector of Berlin), Communist China, North Korea, North Vietnam, Outer Mongolia, and the Union of Soviet Socialist Republics;

(h) Any loss arising from operations by the named insured to or from installations of the Distant Early Warning System (DEW line) or the Ballistic Missile Early Warning System (BMEWS) § 208.14 Filing of certificates, endorse. ments, and notices.

(a) Certificates of insurance, endorse. ments, and notices of cancellation shall be filed in duplicate on forms prescribed and furnished by the Board. All documents shall be signed in ink by an authorized officer or agent of the insurer; no facsimile signatures will be accepted.

NOTE. CAB Forms 606, 607, 608, and 609 are available, upon request, from the Publications Services Section, Civil Aeronautics Board, Washington, D.C. 20428.

(b) Endorsements that add previously unlisted aircraft to coverage or that delete listed aircraft from coverage shall be filed with the Board not more than 5 days after the effective date of such endorsement: Provided, however, That aircraft shall not be listed in the carrier's operations specifications with the Federal Aviation Agency and shall not be operated unless liability insurance coverage has attached.

(c) A supplemental carrier which intends to operate a charter flight to or from a country of the Sino-Soviet block or Cuba or to or from a DEW line or BMEWS installation and whose approved insurance coverage excludes operations within such areas shall file an endorsement waiving the applicable exclusion, or a separate certificate of insurance expressly applicable to such flight, at least 30 days before the proposed flight date, unless the Board finds that waiver of this requirement is in the public interest.

(d) Certificates of insurance approved by the Board shall not be canceled by the insurer upon less than 30 days' notice to the Board and the insured carrier by registered mail. An insured carrier shall not cancel an approved certificate during the effectiveness of any operating authorization from the Board unless the notice of cancellation is accompanied by a replacement certificate of insurance, complying in all respects with this part and effective upon the date of cancellation of the approved certificate and policy, or by a notice that the carrier has ceased operations.

(e) If any certificate of insurance endorsement, notice of cancellation, or other document relating to liability insurance required to be filed with the Board does not comply with these regulations, the Board will notify the air carrier and the insurer by registered mail, or by telegram, stating the deficiencies. If the carrier is not notified of objections by the Board within 20 days after filing of any document, such document shall be deemed approved by the Board as complying with the requirements of this part, but such approval may be rescinded by the Board upon reasonable notice.

(f) All documents required to be filed with respect to liability insurance shall be filed with the Civil Aeronautics Board, attention of Bureau of Accounts and Statistics, B-42b, Washington, D.C. 20428.

§ 208.15 Compliance.

In addition to all other applicable sanctions provided by law or the regulations of the Board, operation in air transportation of any aircraft, or performance of services within any geographical area, to which Board-approved liability insurance does not apply shall be cause for immediate suspension of all operating authority, pursuant to section 401(n) (5) of the act and Subpart J of Part 302 of this chapter.

MINIMUM EXTENT OF SERVICE

§ 208.25 Minimum service requirements. Each supplemental air carrier shall perform services authorized by its certificate or authority to engage in supplemental air transportation for at least 500 hours of revenue flight in any two consecutive calendar quarters. Failure to perform such minimum services will be deemed to constitute a prima facie case for suspension of the carrier's operating authority pursuant to the provisions of section 401(n) (5) of the act: Provided, That the carrier may, within 15 days after the end of the two consecutive calendar quarters in which such failure occurred, show unusual circumstances constituting good cause why its operating authority should not be suspended.

OPERATIONS AND TARIFFS

§ 208.30 Prohibited advertising.

(a) No supplemental air carrier shall advertise its services or hold itself out to the public as an air carrier authorized to engage in air transportation unless it includes the words "supplemental air carrier" in such advertising.

(b) No supplemental air carrier shall conduct business in any name other than that set forth in its certificate, except as expressly authorized by the Board. § 208.31

[Reserved]

§ 208.31a Written agreements with ticket agents.

Each agreement between a supplemental air carrier and any ticket or cargo agent shall be reduced to writing and signed by all the parties thereto, if it relates to any of the following subjects:

(a) The furnishing of persons or property for transportation;

(b) The arranging for flights for the accommodation of persons or property;

(a) Every agreement to perform a charter trip, except charters for the Department of Defense, shall be in writing and signed by an authorized representative of the supplemental air carrier and the charterer prior to operation of a charter flight: Provided, That where execution of a contract prior to commencement of flight is impracticable because the charter has been arranged on short notice, compliance with the provision hereof shall be effected within seven (7) days after commencement of the flight. The written agreement shall include without limitation:

(1) Date and place of execution of the contract or agreement;

(2) Signature, printed or typed name of each signatory, and official position of each;

(3) Dates of flights and points involved;

(4) Type and capacity of aircraft: Number of passenger seats available or pounds of cargo capacity; and

(5) Rates, fares, and charges applicable to the charter trip, including the charter price, live and ferry mileage charges, and layover and other nonflight charges;

(6) The name and address of either the surety whose bond secures advance charter payments received by the carrier or of the carrier's depository bank to which checks or money orders for advance charter payments are to be made payable, as escrow holder pending completion of the charter trip; and

(7) A statement that unless the chartterer files a claim with the carrier, or, if he is unavailable, with the surety, within sixty (60) days after the cancellation of a charter trip with respect to which the charterer's advance payments are secured by the bond, the Surety shall be released from all liability under the bond to such charterer for such charter trip. (see § 208.40(e)).

(b) No term or condition of the charter contract shall on its face be inconsistent with any provision of the carrier's published tariff.

[ER-810, 38 FR 20256, July 30, 1973]

§ 208.32 Tariffs and terms of service.

(a) No air carrier shall perform any supplemental air transportation unless such air carrier shall have on file with the Board, pursuant to Part 221 of this chapter, a currently effective tariff showing all rates, fares, and charges for the use of the entire capacity or less than the entire capacity (see § 208.6(c)) of one or more aircraft in such supplemental air transportation and showing all rules, regulations, practices, and services in connection with such supplemental air transportation, including eligibility requirements for charter groups not inconsistent with those established in this part.

(b) The total charter price and other terms of service rendered pursuant to this part shall conform to those set forth in the applicable tariff on file with the Board and in force at the time of the respective charter flight and the contract must be for the entire capacity or for less than the entire capacity (see § 208.6(c)) of one or more aircraft. Where a carrier's charter charge computed according to a mileage tariff includes a charge for ferry mileage, the carrier shall refund to the charterer any sum charged for ferry mileage which is not in fact flown in the peformance of the charter: Provided, That the carrier shall not charge the charterer for ferry mileage flown in addition to that stated in the contract unless such mileage is flown for the convenience of and at the express direction of the charterer.

(c) Every charter tariff shall contain the following provision: Payments for a charter flight made to any person to whom the carrier, directly or indirectly, has paid a commission or has agreed to pay a commission with respect to such flight, shall be considered payment to the carrier: Provided, however, That this requirement shall not be applicable to foreign-originated charters.

(d) Each and every contract for a charter to be operated hereunder shall incorporate the provisions of §§ 208.10 through 208.15, inclusive, and 208.32a, 208.33, and 208.33a, where applicable, concerning insurance and substitute transportation.

(e) The carrier shall require full payment of the total charter price, including payment for the return portion of a round trip, or the posting of a satisfactory bond for full payment, prior to the commencement of any portion of the air transportation: Provided, however, That

in the case of a charter for less than the entire capacity of an aircraft pursuant to § 208.6(c), the carrier shall require full payment of the total charter price, including payment for the return portion of a round trip, not less than 30 days prior to the commencement of any portion of the transportation, and such payment shall not be refundable unless the charter is canceled by the carrier or unless the carrier accepts a substitute charterer for one which has canceled a charter, in which case the amount paid by the latter shall be refunded. For the purpose of this paragraph, payment to the carrier's depository bank, as designated in the charter contract, shall be deemed payment to the carrier.

(f) Where four or more round trip flights per calendar year are conducted on behalf of a chartering organization by a carrier or carriers, one-way passengers shall not be carried except that up to 5 percent of the charter group may be transported one way in each direction, there shall be no intermingling of passengers and each planeload group, or less than planeload group (see § 208.6 (c)), shall move as a unit in both directions, except as provided in § 208.36. This provision shall not be construed as permitting knowing participation in any plan whereby each leg of a round trip is chartered separately in order to avoid the 5percent limitation aforesaid.

[ER-803, 38 FR 14272, May 31, 1973, as amended at ER-810, 38 FR 20256, July 30, 1973]

§ 208.32a Flight delays and substitute air transportation (foreign). Supplemental air carriers shall assume, and publish as part of the rules and regulations of their tariffs applicable to passenger service in foreign air transportation, the following obligations without prejudice, and in addition, to any other rights or remedies of passengers under applicable law:

(a) Substitute air transportation. (1) On all charter flights, unless the air carrier causes an aircraft to finally enplane each passenger and commence the takeoff procedures at the airport of departure before the 48th hour following the time scheduled for the departure of such flight, it shall provide substitute transportation in accordance with the provisions of this paragraph.

(2) As soon as the air carrier discovers, or should have discovered by the exercise of reasonable prudence and fore

thought, that the departure of any such charter flight will be delayed more than 48 hours, such air carrier shall arrange for and pay the costs of substitute air transportation for the charter group on another charter flight, operated by any other carrier or foreign air carrier.

(3) When neither the charter transportation contracted for nor substitute transportation has been performed before the expiration of 48 hours following the scheduled departure time of any such charter flight, the charterer, or his duly authorized agent, may arrange for substitute air transportation of the members of the charter group, at economy or tourist class fares, on individually ticketed flights and the chartered air carrier shall pay the cost of such air transportation to the substitute air carrier or foreign air carrier.

(4) In determining the period of time during which the departure of a charter flight has been delayed within the purview of this paragraph, periods of delay caused by the prohibition of flights to or from the airport of departure because of weather or other operational conditions affecting such airport shall be excluded if, and while, the air carrier has available an airworthy aircraft which is capable of transporting the charter group in a condition of operational readiness.

(b) Incidental expenses.' (1) On the return leg of a charter flight bound from a point outside the country where the charter originated and is to terminate, unless the air carrier causes an aircraft to finally enplane each passenger and commence the takeoff procedures at the airport of departure before the 6th hour following the time scheduled for the departure of such flight, it shall pay incidental expenses in accordance with the provisions of this paragraph. Such payments shall be made at the airport of departure as soon as they become due to the charterer, or its duly authorized agent, for the account of each passenger, including infants and children traveling

2 Although the requirements with respect to providing incidental expenses are made expressly applicable only to the return leg of a charter flight, the air carriers are expected in the case of delay in departure of the originating leg of a flight, to furnish such incidental expenses to charter passengers whose homes are not located within a reasonable distance from the point of origination of the charter.