MAJOR LOSSES/PRE- AND POST- ACCIDENT ISSUES

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1 AIRPORTS COUNCIL INTERNATIONAL NORTH AMERICA 16 TH ANNUAL RISK MANAGEMENT CONFERENCE MAJOR LOSSES/PRE- AND POST- ACCIDENT ISSUES January 16, 2015 San Diego, CA Garrett L. Pendleton, Esq. Vice-President Claims Manager

2 DISCLAIMER Certain statements provided herein are based solely on the opinions of AIG and are being provided for general information purposes only. Any opinions provided on economic trends should not be relied upon for investment decisions and are solely the opinion of AIG. Certain information may be based on information received from sources AIG considers reliable; AIG does not represent that such information is accurate or complete. Certain statements contained herein may constitute projections, forecasts and other forward-looking statements which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein are valid only as of the date of this document and are subject to change. AIG is not soliciting or recommending any action based on any information in this document.

3 Outline Context Asiana (OZ) 214 MH370 MH17 GE222 Airport Emergency Plans Family assistance Applicable regimes Common themes The airport perspective Social media new challenges

4 Asiana (OZ) 214 Boeing from Seoul, S Korea to San Francisco, USA 307 on board, of which 291 passengers 3 fatalities and multiple injuries 9 nationalities on board, majority of which were Chinese with others from South Korea, USA and elsewhere

5 MH 370 Boeing from Kuala Lumpur to Beijing 239 on board, of which 227 were passengers All remain missing, presumed deceased 14 nationalities on board, majority of which were Chinese with others from Malaysia, Indonesia, Australia, Europe and USA

6 MH17 Boeing from Amsterdam to Kuala Lumpur 298 on board, of which 283 were passengers All were killed in the incident 10 nationalities on board, majority of which were Dutch with others from Malaysia, Australia, Indonesia and UK

7 GE 222 ATR 72 domestic flight 58 on board of which 4 were crew 10 passengers surviving, with the remainder being killed Ground injuries in addition Victims largely Taiwanese

8 The Airport Emergency Plan A Work in Progress

9 AEP Validation & Testing Pre-loss planning is critical to minimize catastrophic effect on business operations and should be part of every organization s strategy. Primary areas of focus should include: Review of prior loss history for identification of successes and failures; What if analysis using hypothetical events to determine extent of organization's preparedness; Identification of key revenue generating activities that may be impacted, including critical delivery points, and development of comprehensive business continuity and disaster recovery plan to help maintain operations; Interview and select key disaster recovery vendors to help with loss mitigation and create a restoration program specifically tailored to the needs of the operations; and Understand insurance program and discuss with broker.

10 Risks in the wake of an emergency Important to act swiftly, but prudently. Very chaotic situation where decision makers can be overloaded with communications from on-site vendors (ie. airlines), employees, the public, loss adjusters, insurance carriers, and media. Simplify the post-catastrophe process by focusing on: Minimizing operational disruption and getting operations back up and running; Coordinating all necessary resources to help respond to the loss; and Jumpstarting the claims process quickly to speed recovery and help ensure the best possible result. Communication is key!!

11 The Benefits of the Drills. Business continuity testing by stressing of call trees and identification of communication needs. Identification of medical treatment limits and resources. Identification of response team roles, resources and limitations. Pre-planning for getting ahead of the media. Checklist development and testing. Emotional pre-planning for critical incident stress. Regulatory compliance.

12 Insurer Approach to Incidents Partner with the airport operator throughout the year preparing to handle the unexpected Dedicated disaster team to enable a rapid and multidisciplinary response 24/7 Airport claims unit is supported by dedicated aviation adjusters in geographic region. Approach each incident as potential airport liability, conduct thorough investigation and preserve all evidence, but tender claims and litigation pursuant to applicable use agreements.

13 Family assistance the airport perspective Less detailed than for airlines but...where most families will gather ICAO: Because airports are often where families and friends first gather to receive information, airports need to have plans to provide assistance to accident victims and their families, with focus on immediate care and support following an accident...all airports associated with the operation may need to be involved in the provision of family assistance including the airport of departure, destination airport and alternate airports Pre-planning critical; Prior co-ordination with airlines, governmental and quasi-governmental authorities, police and other agencies Privacy for families and protection from media Access to medical support for all injuries... Language capability?

14 Issues for families View Bodies Visit Hospitals Meet Survivors Support Relatives Requirements Hotel(s) Religious Input INFORMATION Briefing

15 Airport other challenges Wreckage Moving it and when; Re-opening runway? Preservation of evidence... NB. Airport Insurers' perspective/role?

16 Family Assistance common themes Information what happened; whereabouts of victims and remains; whereabouts of personal effects Emergency response Travel/lodging to family assistance centre Site visit? Financial support Social, emotional and psychological support Progress of investigation

17 Post-Catastrophe Framework: Regulatory Responsibilities Foreign Air Carrier Act 1997 carrier only Aviation Disaster Family Assistance Act 1996 By inference, airport to support carrier and NTSB Airlines and airports must file ERP with Department of Transportation 14 CFR defines Airport Emergency Plan (AEP) requirements Airport response largely not in the spotlight, but a foreign air carrier with a limited operational presence is cause for concern.

18 Aviation Disaster Family Assistance Act 1996 Requires air carriers to have plans detailing the notification to family members about an accident, the handling of manifests, the training of support personnel, the management of personal effects, and the coordination of memorials. Tasks the NTSB with coordinating the efforts of the air carrier, local responders, and federal agencies for the family assistance response. The NTSB Federal Family Assistance Plan for Aviation Disasters details the responsibilities of the air carrier, the NTSB, specific federal agencies, and the American Red Cross.

19 What areas of consideration should airports have in planning to assist families during the first few hours of an aviation disaster? Although not currently required, airports should have plans to assist victims and their families during the initial hours following an aviation accident. Airport emergency planning is especially critical for smaller air carriers or charter operations that have a limited presence at the airport. Consider providing family members a private and secure area to gather (Friends and Relatives Reception Area) while awaiting information from the air carrier. Air carrier clubs, conference rooms, or restaurants can serve this purpose. If located within the sterile area, entry procedures must be established with the Transportation Security Administration (TSA) and Federal Security Director prior to an accident. Police officers should be used to secure the room and the immediate area from the general public. Local Red Cross chapters should be included in planning sessions as they can provide disaster mental health and medical services personnel, as well as other needed local resources, to assist air carrier staff with families at this location. When selecting the location, consideration should be given to the following: Proximity to restrooms and other amenities Privacy from the general public Privacy from the media Availability of television access to family members, if desired A location that does not overlook the accident site (if at all possible)

20 What areas of consideration should be given when airports are reviewing their airport emergency plans? If an airport s plan calls for sealing off access to the airport or terminals during an emergency, local air carrier management should provide a list of employees required to have access to the airport or terminal(s) during such a period. Airport Operations Access (AOA) badges for these individuals should be issued with a unique indicator. Some airports have used the following indicators: COMMAND POST, EMERGENCY ACCESS, INCIDENT RESPONSE, DISASTER RESPONSE, or a large letter E. Once chosen, the format is relayed to law enforcement agencies securing the airport, thus allowing air carrier/airport personnel wearing a badge to gain access even when roadways are closed. To reduce confusion by responding mutual aid agencies, airports should consider placing large signs at their predetermined staging and emergency access areas and gates. These signs should be reflective, preferable white wording on a red background, using simple text; for example, ARFF STAGING AREA A or MUTUAL AID ACCESS GATE #5. Airports should review and contact emergency service agencies within a 5-mile radius of the airport to receive aircraft emergency ingress/egress familiarization and training. Airport fire services can coordinate with air carriers to arrange familiarization tours of various air carrier aircraft types. Pre-accident meetings with local emergency planners; hospitals; the American Red Cross; city, county, and State police and fire services; and clergy help to familiarize response groups with one another.

21 Are there any special considerations about moving wreckage after life-safety efforts have been completed? Once the emergency response moves from rescue to recovery, the area should be sealed off until an NTSB representative arrives on the scene. If at all possible, pieces of wreckage should not be moved. If the wreckage must be moved, it is critical to document the process in writing. Additionally photographs of the wreckage should be taken before and after disturbing the items. In some accidents, the NTSB will request the assistance of the FBI Evidence Response Team (ERT) to document the scene and conduct the recovery operation. The FBI ERT is available nationwide and offers a standard level of documentation and recovery to the NTSB.

22 If the accident is caused by a criminal act, who will be in charge? For aviation accidents caused by intentional criminal acts, the FBI is the lead investigative Federal agency. The NTSB may support the FBI with technical expertise. Because of the importance of evidence preservation and documentation, local authorities must ensure that all wreckage is preserved and not moved unless necessary for life-safety activities.

23 14 CFR Designed to minimize the possibility and extent of personal injury and property damage on the airport. Aircraft incidents Bomb incidents Structural fires Fuel storage fires Natural disasters Hazardous materials Sabotage/hijacking Power/lighting failures Medical services/transportation/hospitals and other facilities Mutual aid for medical services Plans for crowd control Aircraft removal Review plan every 12 months Full scale exercise every 36 months

24 FAA Consolidated Advisory Circular AC 150/ C 286 page document that requires the following for an AEP: Assigns responsibility to organizations and individuals for carrying out specific actions at projected times and places in responding to an emergency. Sets forth lines of authority and organizational relationships, and shows how all actions should be coordinated. Describes how people and property will be protected in emergencies and disasters. Identifies personnel, equipment, facilities, supplies, and other resources available within the airport or by agreement with communities for use during response and recovery operations. As a public document, cites its legal basis, states its objectives, and acknowledges assumptions. Facilitates response and short-term recovery to set the stage for successful long-term recovery.

25 AIRPORT RESPONSE Coordination with investigators, airline, passengers, public and media. Challenges may include language barriers, passenger tracking, HIPPA, triage, etc. Carrier is largely responsible for assisting in accident investigation and family assistance.

26 Large number of survivors. Social media. Foreign language barriers. Traditional media. Holiday weekend. Technology issue. Triage. Multijurisdictional response. Manpower. HIPPA. Information gathering. Communication processes. Customs and Border Patrol. Government agencies. Airport Challenges

27 Airport Exposures and Indemnity Provisions CFR Response and Recovery Operations Airport Use and Lease Agreement Airline to indemnify airport and hold harmless for all but airport s sole negligence Tenders Burden of Proof Medical Payments Coverage

28 Bring Bring on tomorrow on DISCUSSION AND QUESTIONS

29 Thank you for listening GARRETT L. PENDLETON, ESQ.

30 American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries.. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange. Additional information about AIG can be found at YouTube: LinkedIn: AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

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