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Amendments have been made to the Russian Federation Air Code regarding compulsory liability insurance for carriers for damage to passengers’ lives or health during air transport, or to passengers’ baggage and possessions with them at the time.

Insurance payouts in the case of a passenger’s death during domestic air transport come to two million roubles plus burial expenses not exceeding 25,000 roubles. The number of beneficiaries under the terms of such compulsory insurance contracts has been widened to include citizens entitled to compensation for loss of a breadwinner in accordance with civil law, and, in the absence of such individuals, the deceased passenger’s parents, spouse or children, and in the case of a passenger with no independent income, the persons on whom the passenger was dependent. The insurance payouts are divided between the beneficiaries proportionally to their number.

In the event of damage to a passenger’s health, compensation will be paid but the sum shall not exceed two million roubles.

Compensation for damage to baggage has been increased in accordance with the Federal Law to 600 roubles for every kilogram, and compensation for damage to possessions with the passenger at the time has been increased to 11,000 roubles.

Compulsory insurance contracts can set a higher level of compensation for damage.

Insurance payouts and compensation for international air transport cannot be higher than the levels set in accordance with the Russian Federation’s international agreements.

Compulsory insurance tariffs for carriers’ civil liability to passengers on aircraft are set by the insurer. The procedures for exercising the rights and obligations of the parties to compulsory insurance contracts for carriers’ liability for loss of life or damage to the health, possessions, or baggage of passengers during air transport, concluded for a duration of not less than one year, are set by standard rules for compulsory civil liability insurance for carriers with regard to the passengers on aircraft, approved by the Government of the Russian Federation.

The Federal Law also stipulates that carriers shall pay compensation for the death or damage to the health of a passenger in the absence of a situation covered by insurance. Compensation for loss of life of a passenger shall not be less than two million roubles for each passenger. Compensation for damage to the health of a passenger will depend on the nature and seriousness of the damage (this rule will take effect as from January 1, 2010, and until this time, carriers’ liability for damage to the health of passengers will be defined according to the rules set out in chapter 59 of the Russian Federation Civil Code).