From Story:

Airlines Covered For Y2K Liability - U.S. Insurer
02:03 a.m. Jun 11, 1999 Eastern

NEW YORK (Reuters) - A major U.S. airline insurer, moving to ease millennium bug concerns, said its policies cover commercial airlines if any passengers are injured or property damaged in an accident caused by a Year 2000 computer glitch.

``If it is an accident that would ordinarily be covered, we don't distinguish between a Y2K-generated event and a non-Y2K-generated event,'' said Tim McSwain, senior vice president with United States Aviation Underwriters Inc.

The broader insurance industry has generally taken the position that it will not cover most losses related to the millennium bug because insurance covers unexpected losses.

This has created some concern that airlines and their passengers might not be covered by the airline's insurance liability policy.

``It's not our intent to withhold coverage to passengers, that would otherwise be there, just because it was caused by a Y2K event,'' McSwain said in an interview this week.

United States Aviation Underwriters manages a group or pool of insurers that collectively functions as a worldwide aviation insurance market.

That pool, known as the United States Aircraft Insurance Group (USAIG), participates on insurance programs for 80 percent of U.S. airlines and is the lead insurer for United Airlines' parent UAL Corp, Delta Air Lines Inc and Continental Airlines Inc .

The U.S. Department of Transportation earlier this year raised concerns about warned U.S. and foreign airlines that they risked operating illegal flights if their passenger, third-party and property liability insurance did not cover the Year 2000 computer bug.

The Year 2000 computer problem stems from an old programming shortcut that used only the last two digits of the year. Many computers now must be modified or they may mistake the year 2000 for the year 1900, leading to possibly serious malfunctions.

The transportation department's statement came after it learned that Lloyd's of London and other major insurers wanted include a clause in their airline liability policies allowing them to exclude coverage of millennium bug losses.

Those exclusions would have allowed the insurers to then ''write-back'' coverage on a limited basis.

USAIG's policies and the policies of most other airline insurers now carry an exclusion for date recognition problems, including the change to the year 2000 and other potentially tricky dates, said USAU vice president William Ranieri.

But, he said, the policies then restore the coverage for injuries to passengers and physical damage to the aircraft and passengers' property arising from aircraft accident.

``Invariably the writeback will co-exist with the exclusion,'' Ranieri said.

The clause, however, makes clear that the policies do not cover other kinds of damage that are not typically covered under a passenger, third-party, property liability policy.

Such damage could include the loss of business because an airline's computers don't work or flight schedules are lost.

``If an airline's computers go down so they can't make reservations and can't make flights, we're not going to cover that,'' McSwain he said.

But McSwain said he does not expect the airlines to encounter major problems.

``In the aviation world, I don't think very much is going to happen,'' he said. ``There may be some sporadic problems with certain local computer applications. But in terms of a worldwide meltdown, I seriously doubt it,'' he said.

If there are any problems, they are likely to hit at the same instant because in the aviation world the New Year will at Greenwich Mean Time, known as Zulu Time by aviators.

So for the airlines, the Year 2000 will arrive at 1900 EST in the eastern United States.

But, McSwain said, ``I don't think it's going to be a major issue for us.''

Copyright 1999 Reuters Limited. All rights reserved. Republication and redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999

Answers

Hoff:

Don't you knw THE CODE IS BROKEN?

It CAN"T BE FIXED

We started TOO LATE

You're telling people to NOT PREPARE!

The FAA are LIARS!

...and what about those POISON CONTRAILS?

Sorry, just wanted to assemble the Doomer complaints now - why wait?

-- Y2K Pro (2@641.com), June 11, 1999.

I'd like to know how Airlines instituting y2k insurance policies is good news? Don't Airlines pay for accidental death and damages to passengers anyway? Regardless of the nature, I don't think there is one airline corporation in the world today who wouldn't pay for killing/maiming/burning/lacerating it's passengers. If gloomers are too quick to soak up bad news, the likes of Y2KPro are too quick oo soak up good news.

-- (esage@uygv.com), June 11, 1999.

esage

It had been common speculation that the readiness of the FAA and airlines would be a moot point at rollover, because no insurance would be issued.

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999.

The FAA is lying, you'd have to be a chimp not to see it,

A list of FAA press releases concerning Y2K compliance:

http://www.y2knewswire.com/19990607.htm

-- (oldyeller@sanfran.com), June 11, 1999.

yeller

FAA: They're LYING!!

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999.

I think this debate has already been had, and I'm not going type myself to death knowing something I have been taught for years. The FAA lies, and it's been instilled into every technician's mind in any aviation course that rule number one is CYA. Cover Your Ass is what I've been dealing with in the aircraft mechanics field for going on ten years. I think I know beter than to play blind man's bluff near the grand canyon. Thanks for the heads up Hoff.

-- (oldyeller@sanfran.com), June 11, 1999.

Well, at least we're back to the nondescript "they lie", as opposed to the BS "news"wire puts out.

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999.

Actually-

This is just another posting example of the inability of the Polly crowd to connect the dots, think ahead, see the big picture. First off, it's great news that the insurance will continue to cover the airlines during the Y2k rollover and beyond. Good news, I give you that! However, (and here's where you Pollys get stopped) there isn't going to be any big airline exposure to cover. The FAA is going to screw up their systems, cutting the amount of actual flying way down. Next, the recession first, and the depression second, is going to cut way down on both passenger and cargo demand. Next, the shortage of oil, and especially jet fuel, will cut the ability to fly those planes way back. Next, most of the airlines depend on a constant level of cash flow, do not have really *deep* pockets, and will start defaulting on all their massive loan payments within a few months into Y2k, which will further cut back on the ability to offer service. So, you see Pollys, there is just a whole lot *more* to this than just the little piece of news that the insurance will be available. Wish this wasn't so hard for you to comprehend, and I think most of us here are getting tired of repeating the basic lessons to you. It's so difficult to deal with learning disabled folks like you. We try, but so far, not much success.

-- Gordon (gpconnolly@aol.com), June 11, 1999.

The insurers just took the airline's money in a sucker bet. The airlines are betting that two things will happen: they'll be allowed to fly through the rollover and they'll need to collect on the policy for an event occurring during the rollover.

The insurers are betting that the FAA or higher powers will forbid all travel over rollover and that there won't be any chance of an accident, since the planes won't be flying. Since insurance companies know very well how to compute the odds of any given event occurring, it makes me wonder if they don't see a flight grounding order in the future.

Like I said, it's a sucker bet and the airlines are ponying up their money for a chance to fly that may well not be there on 01/01/2000. I wonder if they've got a refund clause?

WW

-- Wildweasel (vtmldm@epix.net), June 11, 1999.

Gordon

This is just another posting example of the inability of the Polly crowd to connect the dots, think ahead, see the big picture. First off, it's great news that the insurance will continue to cover the airlines during the Y2k rollover and beyond. Good news, I give you that! However, (and here's where you Pollys get stopped) there isn't going to be any big airline exposure to cover. The FAA is going to screw up their systems, cutting the amount of actual flying way down.

I'd ask for backup, but I know there isn't any. Next?

Next, the recession first, and the depression second, is going to cut way down on both passenger and cargo demand.

And these will happen at rollover? Please. The point of the post was addressed at the speculation that airlines wouldn't be allowed to fly over the rollover due to lack of insurance.

Next, the shortage of oil, and especially jet fuel, will cut the ability to fly those planes way back. Next, most of the airlines depend on a constant level of cash flow, do not have really *deep* pockets, and will start defaulting on all their massive loan payments within a few months into Y2k, which will further cut back on the ability to offer service. So, you see Pollys, there is just a whole lot *more* to this than just the little piece of news that the insurance will be available. Wish this wasn't so hard for you to comprehend, and I think most of us here are getting tired of repeating the basic lessons to you. It's so difficult to deal with learning disabled folks like you. We try, but so far, not much success.

Well, we polly's appreciate the effort. Really we do. But you big-brain "GI"'s will have to be more patient. Some of us just get so confused with you "big-picture" folks.

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999.

Off, I say!

-- Hoffmeister (hoff_meister@my-deja.com), June 11, 1999.

Hoffy, Hoffy, Hoffy,

Whatever are we going to do with you? I guess I got you excited, huh, what with all that *bold* stuff. However, you keep focusing on the wrong data. I was going reaaalll slowwww, hoping you would see the dots. But nope, you're still stuck on the insurance thingy. Oh well, I guess you're reaching out as far as you can in your planning. I'm sure not going to make fun of you, just because this "look ahead" stuff is so darn difficult for you to contemplate. The insurance part was a good find Hoffy, a good find, OK? Keep bringing us these little tidbits, we use them in our big picture. Don't worry, we know how to sort them out and make sense of them.

-- Gordon (gpconnolly@aol.com), June 12, 1999.

Gee, I feel so much better that they would pay me lots of money if I DIE. There are so many places to spend your money when you're DEAD. I'm running to book my flight (NOT).

-- Gia (Laureltree7@hotmail.com), June 12, 1999.

Cool, Gordo, glad to help with your big picture. Maybe next time they'll let you graduate from crayons, eh?

-- Hoffmeister (hoff_meister@my-deja.com), June 12, 1999.

Hoffy,

Are you still playing with crayons? I guess it's worse than I thought for you. No wonder you have trouble connecting the dots. You need to get one of those fine line pens, for a starter, then spend a LOT of time lurking here and soaking up those pesky details. We don't have a lot of catch-up time left for you, but if you are willing to spend about 40 hours a week at just studying this matter, it will be a big help.

-- Gordon (gpconnolly@aol.com), June 12, 1999.