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BUSINESS / LEGAL WORKING GROUPCHRIS KUNSTADTER | XL INSURANCE | MAY 2013

© 2013, XL Group plc companies. All rights reserved. MAKE YOUR WORLD GO

Agenda Topics

Introductions – Chris Kunstadter, Russ McMurry MPL methodology review – Chris Kunstadter GSO and NGSO forecasts – Chris Kunstadter, Kate Maliga Waivers for many payloads (“Part 440 Modifications”) – Randy

Repcheck Develop a legal framework for private exploitation and utilization

of space resources – Joanne Gabrynowicz Long-term extension of third party risk-sharing regime – Jim

Muncy Strengthening of informed consent protection from unrestricted

second party litigation – Michael Lopez-Alegria Inclusion of spaceflight participants in third-party

indemnification – Michael Lopez-Alegria Termination Liability – Michael Lopez-Alegria

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MPL Methodology Review

Telcon Jan 25, 2013 – 50+ participants Recommendations for organizations to perform

MPL review ACTA White Sands Research and Development Various “cat” modelers – catastrophe risk

analysis for the insurance industry AIR, Eqecat, RMS, etc.

Recommendations forwarded to FAA/AST

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Develop a legal framework for private utilization of space resources Observation/Finding/Recommendation: FAA/AST

should support efforts in Congress and through the Department of State to confirm the right of private sector companies to enjoy the benefits of resources extracted from the surface or subsurface of the Moon and/or other celestial bodies, subject to appropriate regulation by a relevant U.S. Government entity such as FAA/AST.

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Long-term extension of third party risk-sharing regime Observation/Finding/Recommendation: The current

U.S. space launch risk sharing regime is considerably less comprehensive than those of other nations as a recent GAO report described. The Congressional Budget Office has scored this risk-sharing regime as creating no costs for the government.

Observation/Finding/Recommendation: The indemnification regime should be extended for a minimum of ten years, and permanently if possible, or another permanent solution to limit risk for companies and the government should be implemented.

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Strengthening of informed consent protection from unrestricted second party litigation (1/2) Observation/Finding/Recommendation: While the

Commercial Space Launch Act requires that licensees obtain informed consent from their spaceflight participant customers, it is silent on the issue of potential claims from participants in the event of a flight incident or accident.

Observation/Finding/Recommendation: To encourage the successful growth of the commercial space flight industry, operators, manufacturers, suppliers, and other contractors should enjoy a predictable and consistent legal environment where they can be held accountable for deliberate malfeasance or gross negligence, but not for the inherent risks associated with human spaceflight.

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Strengthening of informed consent protection from unrestricted second party litigation (2/2) Observation/Finding/Recommendation: Commercial

spaceflight activities legally implicate the federal government because the U.S. is a signatory to international treaties making nation-states liable for space activities of non-governmental entities.

Observation/Finding/Recommendation: Cross-waivers among all parties on the licensee side of the launch activity should be required, and Federal courts should decide legal cases regarding any element of the federal license, including the legal validity of any waiver of claims signed by spaceflight participants, after being fully informed as to the risks of the spaceflight.

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Include spaceflight participants in third-party indemnification Observation/Finding/Recommendation: Spaceflight

participants are explicitly excluded from Federal indemnification, and not listed in law as a party to be protected by the licensee’s insurance. Therefore, COMSTAC supports modifying CSLA language to specifically include spaceflight participants in third-party indemnification.

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Termination Liability

Observation/Finding/Recommendation: COMSTAC supports termination liability reform at NASA in order to protect commercial and NASA programs from being exposed to overly burdensome termination liability costs. Specifically, there should be a reasonable ceiling on termination liability assessments that reflects historic programmatic cancelation rates at NASA.

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Thank you!

Christopher T.W. KunstadterSenior Vice PresidentXL Insurance+1 212-915-6387chris.kunstadter@xlgroup.com