A new insurance premium will allow Abta members to reduce the cost of bonding for both their retail and Atol business under the new CAA joint-administration scheme (JAS).
The scheme has been devised to allow new Atol holders, caught by the Flight-Plus regulations which are due to come into force this month, to reduce costs and administration.
Abta has today announced that a combined facility will provide members with an option to decrease their overall bonding requirement for Atol to 8% of turnover from the usual 15%.
This will be backed by an Atol Bond Replacement Scheme (ABRS) insurance premium paid to Abta Insurasnce PCC Limited.
The premium will be calculated following a review of the Abta member’s Abta/Atol application and financial status.
John de Vial, head of financial protection at Abta, said: “This scheme provides our members with greater flexibility and a choice as to how they secure the most cost-effective bonding arrangements.
“It will ease the administrative burden of Atol compliance for participating businesses and, for many give the opportunity of reducing the overall bonding costs.”
Abta used the following example to explain the change based on the normal minimum Abta retail bond requirement of £25,000 and minimum CAA Atol bond requirement of £40,000.
Association members who qualifying will have a choice of either:
• providing a new, combined bond, for the £65,000 or;
• a reduced combined bond of £40,000, plus an insurance premium for entry to the Atol Bond Replacement Scheme (ABRS) in respect of the £25,000 reduction in bond required.
The CAA continues to reserve the right to require a bond of more than 15% in circumstances it deems necessary based on its assessment of a firm’s financials.
Under Atol Protection Contribution rules new Atol members are required to bond, as well as pay £2.50 per person, for the first four years with the amount reduced by stages to zero over that time period.
The Abta Atol JAS has been created for smaller and medium-sized firms. Any Abta member with an Atol turnover of less than £1.5 million is eligible to apply.
All Abta members will shortly receive an application pack for the scheme and those interested are encouraged to sign up as soon as possible in order to meet the “challenging CAA deadlines for compliance”.