FAA drone rules could have implications for Canada: Swiss Re

The Federal Aviation Administration’s (FAA) announcement earlier this week that it is partnering with industry to explore the next steps in drone operations beyond its draft rule published in February could have implications for Canada, Anthony Mormino, senior legal counsel with Swiss Re, told Canadian Underwriter.

In particular, the reduction or elimination of the visual line-of-sight limitation on commercial drone use could affect Canadian rules issued by Transport Canada.

In February, the FAA published a draft framework of regulations, proposing safety rules for small unmanned aircraft systems (UAS) under 55 pounds conducting non-recreational operations. The rule limits flights to daylight and visual-line-of-sight operations and addresses height restrictions, operator certification, optional use of a visual observer, aircraft registration and marking and operational limits.

Earlier this week, the FAA announced its Pathfinder program, which involves the FAA partnering with CNN news service, PrecisionHawk (an aerial data solution manufacturer) and BNSF Railroad to “research ways to extend commercial UAS operations outside the current visual line-of-sight limitation,” Mormino said. CNN will be researching how visual line-of-sight operations may be used in news gathering in urban areas; PrecisionHawk will survey crops in rural areas using drones that will fly outside of the pilot’s direct vision; and BNSF Railroad will explore the challenges of using drones to inspect rail infrastructure outside of line-of-sight in isolated areas, Mormino said.

By the end of its comment period on April 24, the FAA had received nearly 4,500 public comments, and the “FAA expects to consider those comments and have the new rules completed by late next year,” Mormino added.

He told Canadian Underwriter that “Canadian re/insurers will be in a position to quickly exploit any advances in UAS technology and insurance uses that the FAA’s new UAS rules bring about. Similarly, success in the FAA’s Pathfinder program to safely reduce or eliminate the visual line-of-sight limitation on commercial drone use could be instructive for Canadian UAS rules issued by Transport Canada.”

Existing U.S. and Canadian UAS regulations are similar in a number of ways: both distinguish between commercial and recreational use, reckless operation is subject to penalties, both mandate flight of UAS only in the daytime, away from airports and only within visual line of sight. “One important difference is that under both its current and prospective UAS rules, the FAA requires all commercial UAS users to obtain its permission to fly; Transport Canada does not require its permission for commercial UAS operators where the aircraft weighs less than 25 kilos (about 55 pounds) and certain other requirements are met,” Mormino said.

While a handful of insurance carriers have already received permission to fly UAS for commercial purposes under the FAA’s “current, albeit burdensome rules,” Mormino said, the FAA’s new and simpler rules may attract a much larger number of insurers to employ UAS in their operations. This could include for underwriting, to inspect risks, gather photos and data, such as roof inspection, as well as in claim handling and to more quickly process claims. “For example, after natural disasters, by allowing them to inspect damage – especially in remote locations – in real time,” Mormino said, adding that insurers could have benefitted from the use of drones in loss inspection during the recent floods in Alberta.

Despite the prospective simplification of the FAA’s UAS rules, however, they will continue to mandate that UAS be operated only during daylight hours and within the visual line-of-sight of the drone operator. “Commercial UAS operators see this latter rule as a big impediment to unlocking the full potential of commercial UAS, such as inspecting or spraying crops on large commercial farms, or delivering small packages via UAS to remote consumers,” Mormino said. “This same problem exists for insurance companies that plan to integrate UAS into their operations.”

He suggested that reducing or eliminating the visual line-of-sight limitation on commercial drone use will allow insurance companies to employ unmanned aerial vehicles (UAV) to their fullest extent in underwriting and claims management. “Consider that the FAA has already granted a number of insurance companies permission to test and use UAV for insurance inspection purposes. Until the FAA mitigates the visual line-of-sight limitation, however, the foregoing insurance uses for UAV will remain drastically limited,” Mormino argued.