Attachment 1 - FCT Insurance SOW.docx

PART 1 - SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

Section C

PART 1 - SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C.1 INTRODUCTION

The FAA has national contracts for providing air traffic control services at visual flight rules (VFR) control towers. This program is referred to as the Federal Aviation Administration Contract Tower (FCT) Program. Considering the devastating effects associated with an aircraft accident, the FAA acknowledges a need for the Agency to provide aircraft accident liability insurance coverage at each of the FCT locations. The FAA requires a liability insurance coverage for each of the approximately 264 FCT locations.

C.2 SCOPE

The Contractor must provide technical assistance to the FAA in all aspects of an Aviation Liability Insurance program. The program will provide for a structured approach for acquiring Aviation Liability Insurance to cover current and future FCTs. FCT locations are shown in Section J, Attachment J001, Facility Locations. The Contractor must provide managerial support of the Insurance Program to the FAA after the program has been acquired and implemented. The economic objective of the Aviation Liability Insurance Program is to gain FCT insurance at costs favorable to the FAA.

c.3 REQUIREMENTS c.3.1 Brokerage Services to Acquire Aviation Liability Insurance

The Contractor must provide brokerage services to acquire aviation liability insurance at the FCT locations identified in Section J, Attachment J001, Facility Locations. The Contractor must ensure that the FAA retains the flexibility to change the number of facility locations and/or the specific facilities as required. The liability coverage to be provided at each location is $20,000,000 per incident, with no aggregate limit.

C.3.1.1 Recommending Insurer(s)

The Contractor must make written recommendations for the selection of insurers to the FAA. Upon review by the FAA of acceptability of the recommended insurance program, the Contracting Officer will provide written authorization for the Contractor to proceed with policy placement. Following placement, the Contractor must act as a liaison between the FAA and the insurers.

The written recommendation must include, at a minimum, the various courses of action, the advantages and disadvantages of each course of action with conclusions and recommendations. Each recommendation must include the full and complete cost to the Government for the specific insurance under such recommendation, including all premiums, taxes, and fees (e.g., application surplus lines taxes and/or fees to state regulators, boards, or associations). Any fees, commissions and other remunerations identified after the time of the recommendation will be borne by the contractor.

The Contractor agrees the FAA will not be responsible and hold the FAA harmless in the event that an insurer contests, by way of a dispute or protest that it was not presented to the FAA by the Contractor as a recommended insurance program to the FAA.

C.3.1.2 Utilization of Intermediaries

Contractor may utilize the services of other intermediaries to assist in the marketing of the FAA's insurance (including brokers in the London and other markets), when in Contractor's professional judgment those services are necessary or appropriate. Such intermediaries may be affiliates of Contractor or not related to Contractor. The compensation of such intermediaries is not included in Contractor’s compensation under this contract and will be paid by insurers out of paid premiums.

C.3.2 Claim Management Services and other Aviation Liability Program Management functions

The Contractor must provide claims management service and liaison between the FAA and the insurers for the insurance program, which include:

1. Develop a management plan that includes, at a minimum, identification of the:

a. Structure and methods to be used to support the FCT Aviation Liability Insurance Program.

b. Types and methods of reporting on program status and controls; and

c. Approach to identifying and mitigating any program risks.

2. Establish an insurance manual that includes, at a minimum, a Policy Form, Summary of Coverage, Certificate of Insurance, and Claim Reporting Procedures

3. Issuing insurance certificates

4. Following-up with insurers for timely issuance of policies and endorsements

5. Following-up with insurers to identify any return premiums the FAA may be entitled to and recommend reimbursement alternatives to the FAA including reductions in premiums.

6. Consulting with the FAA regarding specific claims

7. Following-up with insurers with respect to timely collection of claims; and

8. Processing, or facilitating the processing of, certificates of insurance with respect to insurance policies placed by the Contractor, as requested by the FAA.

Contractor must assist with documentation and other steps to obtain commitments for and implementation of the FAA's insurance program upon the FAA's instructions. It is understood that the Contractor will not independently verify or authenticate FAA-provided information necessary to prepare underwriting submissions and other documents relied upon by insurers, and the FAA will be solely responsible for the accuracy and completeness of such information and other documents furnished to Contractor and/or insurers and will sign any application for insurance.

C.3.3 Advisory Services

The Contractor must provide advisory services on the acquisition of aviation liability insurance to include:

1. Submitting a quarterly report providing status of the insurance program to the FAA. These status reports must, at a minimum, include the current market conditions, anticipated actions relative to market conditions, pre-renewal recommendations, renewal strategies, current activities, problems encountered, future activities, and any future anticipated problems.

2. Submitting an annual forecast report of market conditions which must provide, at a minimum, an analysis of how forecasted market conditions will impact the FCT insurance program, any recommendations on changes to the program, and any recommended changes to the insurance liability limits.

3. Assisting the FAA in connection with issues relating to interpretation of insurance policies placed by the Contractor.

4. Monitoring the market conditions and any other factors affecting the FCT insurance program keep the FAA informed of significant changes and/or trends in the insurance marketplace.

5. Monitoring published financial information of the FAA's current insurers and alert the FAA when the financial rating of any insurer changes. Contractor will not, however, be responsible for the solvency of any insurance carrier or its ability or willingness to pay claims, return premiums or other financial obligations. Insurers with whom the FAA's risks have been placed will be deemed acceptable to the FAA, in the absence of contrary instructions from the FAA.

End of Section C