26.1-48 Aircraft Aftermarket Risk Contracts and Insurance
Download pdf
Loading PDF...
<![CDATA[CHAPTER 26.1-48AIRCRAFT AFTERMARKET RISK CONTRACTS AND INSURANCE26.1-48-01. Definitions. As used in this chapter:1."Aftermarket risk insurance" means aircraft and aircraft component product and<br>completed operations liability insurance that conforms with sections 26.1-48-02 and<br>26.1-48-03.2."Aircraft" means general aviation light craft that is powered and intended to fly above<br>the ground; is designed to carry one person or more, but with a maximum seating<br>capacity of fewer than twenty passengers; and weighs less than twelve thousand<br>five hundred pounds [5669.9 kilograms].3."Aircraft component" means a manufactured part or assembly intended for use in<br>the construction, replacement, or repair of an aircraft.The term includes anycomplete aircraft subsystem, including the aircraft engine, that carries its own<br>manufacturer's warranty or services provided separately from the warranty of the<br>manufacturer of the aircraft.4."Aviation manufacturer" means a manufacturer of aircraft or aircraft components<br>who has its place of manufacture and place of production of aircraft or aircraft<br>components located within this state. The term includes a manufacturer located in<br>this state who imports raw materials, components, and aircraft subassemblies from<br>outside the state for manufacturing purposes. The term also includes a person who<br>modifies, maintains, alters, repairs, or installs aircraft components in aircraft in<br>accordance with federal aviation administration regulations and holds a repair station<br>certificate issued by the federal aviation administration.26.1-48-02. North Dakota aftermarket risk contract. The sale of aircraft and aircraftcomponents sold by an aviation manufacturer and the performance of any modification,<br>maintenance, alteration, repair, or installation of components in aircraft in this state are governed<br>by an aftermarket risk contract. The contract between the seller or aviation manufacturer and the<br>purchaser must be executed at the time of purchase and reconsidered at each subsequent<br>resale. The first and subsequent seller or aviation manufacturer shall agree to be bound by<br>North Dakota law and the aftermarket risk contract or to provide a fully paid aftermarket product<br>liability insurance policy that covers exposure to tort liability within the United States. The option<br>of providing the insurance policy applies only to aircraft or aircraft components that sell for more<br>than two thousand dollars.26.1-48-03. Aftermarket risk insurance requirements - Encumbrances.1.An aftermarket risk insurance policy purchased pursuant to section 26.1-48-02 must<br>hold harmless all aviation manufacturers that manufactured, modified, maintained,<br>repaired, or altered the aircraft or aircraft component assembled or first sold in this<br>state.2.The aviation manufacturer or seller of the aircraft or aircraft component may offer in<br>the sales contract aftermarket risk insurance based on continued choice of North<br>Dakota law. The aftermarket risk insurance option must be attached to the original<br>sales contract as a lien on the aircraft holding the first owner and each subsequent<br>owner financially responsible for the cost of purchasing and maintaining aftermarket<br>risk insurance and binding the owner to governance by North Dakota law.Anaftermarket insurance obligation must be recorded as a lien on the aircraft at the<br>federal aviation administration aircraft registry.26.1-48-04. Stabilization of aftermarket risk insurance market.Page No. 11.An aviation manufacturer and a purchaser of an aircraft or aircraft component which<br>intend to be bound by North Dakota law must be covered by insurance that meets<br>the requirements of insurance laws of this state. The sales contract must include a<br>dispute resolution procedure for aftermarket risk contracts and insurance contracts.2.An aftermarket risk insurance provider domiciled in this state may limit coverage to<br>include any caps and limitations permitted by law at the time of the first sale of the<br>product.3.Upon resale of an aircraft or aircraft component, the purchaser agrees to purchase<br>insurance and the insurance carrier shall provide evidence of coverage. A default on<br>the insurance may reinstate, by contract, the lien back to the aviation manufacturer.<br>An aftermarket risk contract may include a requirement for removal of the aircraft or<br>aircraft component from service, consent to be governed by North Dakota law, and<br>purchase of additional passenger and public risk insurance coverage.4.An aviation manufacturer or value-added reseller shall provide confidential access to<br>data necessary for actuarial analysis by aftermarket insurance carriers to assist in<br>maintaining a competitive insurance market with a choice of alternative carriers.26.1-48-05. Financial responsibility. An owner of an aircraft or aircraft componentmanufactured in this state shall provide proof of financial responsibility in the amount of one<br>hundred thousand dollars, per occurrence, for property damage and personal injury or death on<br>the ground resulting from the use of the aircraft or aircraft component.Page No. 2Document Outlinechapter 26.1-48 aircraft aftermarket risk contracts and insurance]]>