To the extent practical, the premium charged for insurance or reinsurance under this chapter shall be based on consideration of the risk involved.

In setting premium rates for reinsurance, the Secretary may make allowances to the insurance carrier for expenses incurred in providing services and facilities that the Secretary considers good business practices, except for payments by the insurance carrier for the stimulation or solicitation of insurance business.

The Secretary of Transportation may provide insurance and reinsurance under this chapter for a period of not more than 1 year. The period may be extended for additional periods of not more than 1 year each only if the President decides, before each additional period, that the continued operation of the aircraft to be insured or reinsured is necessary in the interest of air commerce or national security or to carry out the foreign policy of the United States Government.

The insurance policy on an aircraft insured or reinsured under this chapter shall specify a stated amount that is not more than the value of the aircraft, as determined by the Secretary in accordance with reasonable business practices in the commercial aviation insurance industry. A claim under the policy may not be paid for more than that stated amount.

(Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1170; Pub. L. 105–137, § 2(b), Dec. 2, 1997, 111 Stat. 2640; Pub. L. 107–42, title II, § 201(d), Sept. 22, 2001, 115 Stat. 235; Pub. L. 107–71, title I, §§ 124(b), 147, Nov. 19, 2001, 115 Stat. 631, 645; Pub. L. 107–296, title XII, § 1203, Nov. 25, 2002, 116 Stat. 2287; Pub. L. 108–176, title I, § 106(c), (e), Dec. 12, 2003, 117 Stat. 2499.)