2021 Federation Licence and Insurance

2021 Federation Licence and Insurance > Questions / Answers

Federation news11 December 20209 min read

News from 11 December 2020. It has not been updated since it was published: some information may have changed. Latest news

IS FEDERATION INSURANCE TOO EXPENSIVE?

In a market under extreme pressure on its balance, one broker has chosen to turn to a Portuguese insurer... with Chinese capital, saving around 30 euros on some insurance products (on others, the federation's offer is more competitive). The use of this insurer, unknown in the market before September, seems to be explained by the withdrawal of this broker's previous insurer. This new insurer is committed only to the previous contract. There is no visibility on what happens beyond July 2021.

In practice, this means that insurance in the aviation field is becoming scarce, and that the commercial practice of racing to cut premiums ends up making insurance impossible. This is exactly the story of the last 20 years in the world of aviation insurance. Those familiar with the field can list the insurers and brokers that have disappeared. The current crisis only accentuates this trend.

A paradox: some of those who encourage this approach also own machines worth 200 000 euros and want to turn microlight regulation into aeroplane regulation while saving 30 euros… Moreover, this broker seems to be bringing together, perhaps unintentionally, people who have always opposed federation policy: active on the web, inactive in the field.

The federation has made the choice of a clear and transparent long-term partnership with a well-known, solid French insurer that supports federation policy. This partnership allows us to build an ambitious flight safety policy (REV action, ENAC partnership, training actions…) that stabilises microlight risk for everyone (members or not)! However, it is entirely possible to be a federation member and be insured elsewhere (about 25% of members).

➔ The question is therefore not for or against the federation, but what is the right price for what service?

WHY DID WE LEAVE UFEGA?

At the start of 2020, the federation decided, like the FFVL before it and the FFVP since, to leave the UFEGA structure (Union des Fédérations Gestionnaires d’Assurance), which had been created in 1999 by the broker Castany within the FFVP. When that broker failed, which made the legal headlines at the time, the world of aviation federation insurance was turned upside down. All the federations insured through that broker therefore came together to make up for the failure, starting afresh on “healthier” foundations. At that time, the aviation insurance market was very different, with many insurers.

Since then, the development of the federations and their interests have also changed. The risk generated by microlights is under control. The risk generated by the RSA can involve a two-seater just as much as a warbird. The success of microlighting has also created appetites that worked against the interests of the federation, even though it was the main contributor.

Above all, however, because the insurance market has changed completely, each federation benefits from building a privileged relationship with the insurer without the constraints of a common contract. This is what makes it possible, for example, to have legal protection closer to the field, and mediation. It also makes it possible to offset certain increases through adjustments. And it makes it possible to tailor contract durations as well as possible, or to create new products such as the special instructor user liability cover.

UFEGA's strength was to act as a central purchasing body for the insurance of 5 federations. This worked well for about fifteen years, forcing insurers not to raise their prices over that period. This apparently favourable result in fact gradually caused aviation insurers to disappear from our market. This rise in insurance prices affects all recreational aviation and has absolutely no connection with our withdrawal from UFEGA.

➔ It is therefore in the interest of members that the federation left UFEGA. In fact, that is what all UFEGA members ended up doing.

DOES THE FEDERATION MAKE MONEY AT ITS MEMBERS' EXPENSE?

Premiums are mainly intended to cover the insurer's risk (a single claim can run to around a million or even more!). Part of the payment also goes to the broker, who acts as the interface and does the work between the federation and the insurers. Finally, part of the payment goes to the federation, which provides the tools and the service for members, at a cost that has to be covered.

As for the federation, its budget is made up of 65% from licences and 15% from grants; the rest comes from partnerships, advertising, the shop and insurance commission. The latter pays for a dedicated post, funds the IT tools and contributes to safety and training actions.

Since 2018, the law has required federations to declare themselves as insurance intermediary agents (MIA) if they collect premiums. This is a transparent and clear arrangement that requires registration with ORIAS and avoids “partnerships” with less explicit communication or ambiguous inward-looking relationships.

➔ The federation is a public-interest, non-profit body. Profits are therefore fully reinvested in running the federation. We do not answer to shareholders! The only shareholder is the member!

2021 Federation Licence and Insurance > Questions / Answers

WHY DOESN'T THE FEDERATION OFFER AN INTER-FEDERATION LICENCE LIKE THE RSA?

The RSA has introduced a reduction of 20 euros on its membership fee (which is 20 euros higher than ours…) for members of other aviation federations. It is a friendly initiative, and some people loudly wonder why the federation does not do the same (incidentally, no other federation does). There are good reasons.

A number of RSA members own microlights. Our federation's contract is therefore better suited to them. The reverse is not true, even though relations on the ground have always been rich. The federation has about 16 times more members than the RSA.

The RSA charges all clubs an annual fee of 150 euros, whereas affiliation is free for clubs and for-profit organisations at the federation.

The RSA is not a sports federation and as such does not aim to promote the activity (no introductory flights) or a specific population of instructors. Moreover, the RSA does not have an equivalent payroll. The whole team at the federation's head office is at your service.

➔ The interests, costs and services provided by each party need to be compared before suggesting that there are good little guys and bad big ones by passing on truncated information.

IS THE MEDICAL EXAMINATION AN OBSTACLE TO FLYING MICROLIGHTS?

The competing broker, relaying well-known “anti-federation” arguments, makes the absence of a medical examination (of no contraindication) a selling point for its products.

Let us recall the facts. The Federation, which will be 40 years old in 2021, was built on dual affiliation to the Ministry of Transport and the Ministry of Sport. Halfway between free flight and aeroplanes, this has always been our strength. A medical certificate of no contraindication to microlighting has been compulsory for a first licence for more than 15 years. It has always been well accepted, in the same way as for other motor sports. It is compulsory every year for competition. To guarantee the integrity of the system, all the sports federations have adopted an arrangement that allows a licence to be renewed on the basis of answering a sports health questionnaire (standardised Cerfa form), which makes participants aware of changes in their health. It is an individual questionnaire that rests on each person's own responsibility.

Some former members, particularly angry on social media, cried betrayal! They said we should leave the sporting movement! This arrangement, introduced two years ago, has been well accepted. It is known to the general public. It also provides a robust answer to the criticism that nothing is being done on the medical side. We need to be very clear. If such an arrangement did not exist, if microlighting came under the Ministry of Transport alone, we would have been required (all of us) to take the class 2 aviation medical a long time ago. To claim otherwise is to completely ignore the subject.

➔ It is therefore the federation that protects all practitioners from an aeroplane-type aeronautical inspection. It is particularly cynical that some take advantage, for purely commercial reasons, of this framework that was dearly defended.

BUT WHO IS TELLING THE TRUTH ON SOCIAL MEDIA? FACT OR FAKE?

Social media has created an unfiltered space that frees up all speech. That is a good thing, but it also allows false information to spread without any restraint in a great mix of genres. Taking out insurance is subject to criteria of transparency and integrity. Some notoriously “anti-federation” groups have become the sales agents of a broker. These systematic, caricatured attacks have existed since the federation was born. They are amplified by the spirit of the times, but they bring together supporters of a free-flight type of microlighting with supporters of an aeroplane type of microlighting. Yet let us repeat it clearly, as from the very beginning: microlighting is neither free flight nor aeroplane flying.

Beyond the necessary respect for the law in public exchanges, which applies to everyone (social media or not), the federation is subject to very rigorous democratic oversight. Elections, reports, supervisory authorities, audits and certifications are permanent. Nothing is ever perfect, but what should we say about unions, associations and so-called European federations that mainly claim an audience made up of “someones” on the web, and that have no particular legitimacy and no recognised action in the field? Members are not “likes”. Buzz is not a majority. Federation life is not a remake of “Tintin in the Land of the Soviets”, and 40 people do not make a majority, let alone serve as a cover for a broker.

➔ By taking out insurance through the federation, you benefit from a complete service on every issue affecting your flying, in a relationship based on trust and continuity.

DOES THE FEDERATION OFFER LOYALTY SCHEMES?

Although they are not acting commercially, it is normal that clubs or for-profit bodies that bring together a number of third-party liability (RC) and personal accident (IA) insurance products benefit from specific sponsorship

From 10 members who have taken out User Liability (RC) and Pilot Personal Accident (IA) cover, the club will receive by bank transfer 10% of the premiums collected for liability cover. Beyond 10 policies, the same system applies in blocks of 10.

Example : 10 members take out 5 single-seat User Liability policies at €53, 5 two-seat User Liability policies at €373 and 10 Pilot Personal Accident Capital 10 000 € policies at €37. The club will receive a transfer of €213, i.e. 10% of the total paid for User Liability cover.

DOES THE FEDERATION OFFER PAYMENT FACILITIES?

➔ NEW 2021: From January 2021, the Federation is introducing for members, clubs and for-profit organisations a fee-free monthly payment system by SEPA direct debit for amounts above €300.

➔ The federation remains attentive to your situation in order to offer you the most suitable option.