In February 2012, Congress mandated that the Federal Aviation Administration (FAA) must find a way to integrate unmanned aircraft systems, more commonly known as drones, into U.S. airspace by September 2015.

Not surprisingly, the agency is significantly behind in achieving that goal.

This February, the FAA released a proposed framework of rules that would allow routine use of certain small drones (those less than 55 pounds) conducting non-recreational operations. But it could be years before the proposed rules become solid regulations.

Helping Hand?

The FAA’s proposed rules would limit drone flights to daylight, 500 feet altitude and 100 miles per hour. They would also require operators to maintain visual line of sight with drones at all times, be at least 17 years old, pass an aeronautical knowledge test and obtain an FAA UAS operator certificate.

Experts agree the proposal will help guide insurance companies in asking the right questions of potential clients. “It’s going be a little bit easier to decide the necessary information so that we can look at risks and decide which are writeable,” says Travis French, aviation broker at Arlington/Roe. “Things like requiring an operator’s license, the process they go through where they spell out the nature of their operations—all those things we will incorporate into the underwriting data we collect for each individual risk.”

“It has made the insurance companies start asking questions they hadn’t been asking before,” agrees Doug Johnson, president of JSL Aviation Insurance. “Do you have a certification? Have you applied for a certification? Where exactly are you operating? What are you doing? It has tightened up the underwriting on some of this stuff.”

To maintain certification, an operator would have to re-pass the knowledge test every 24 months. “There will be a few more hoops to jump through for these operators before someone just jumps online, orders a quadcopter, takes it out of the box and starts taking pictures,” French says. “Now there’s going to be a whole process that could take several weeks or even months before you’re actually able to do that legally and by the book.”

What’s Next

But “technically there still are no regulations,” Johnson points out. And insurance professionals can expect “a long, slow review process,” French says—a problem for many drone-operating insurance prospects who currently “feel like they’re operating grey or even operating illegally if there’s even a commercial aspect involved.”

What makes drones such a problem for the FAA? “They’re just inundated right now because the proliferation of drones is so fast and the buy-in is so cheap,” Johnson says. “The thing you don’t have to worry about with airplanes is everybody’s not going to rush right out and buy an airplane because they’re very expensive to own and operate. Drones are not.”

It doesn’t help that the FAA’s rulemaking process is “cumbersome by design because you don’t want a knee-jerk reaction to most things in the aviation industry,” Johnson adds. “But the problem is that this industry is moving so fast that it’s directly opposite of the way they have been able to do things in the past. Every time they think they’ve got an idea of what they ought to do, they come up with 16 other things they didn’t consider because it’s so widespread.”

When the 60-day comment period for the proposed rule ends next month, “the FAA is supposed to review them all and respond accordingly and then they may change the rules,” Johnson explains. The agency could take a variety of approaches after the initial review, he notes: change the rules and send them back out for another comment period, implement the rules as they are or implement the rules with changes.

So when can the insurance industry expect final regulations? “If I had to guess, I would say we’re no closer than a year, and it could be maybe two or three,” French says. “I don’t see this happening quickly. Logistically, it’s a lot to do.”

Bigger Fish to Fry

And drones that weigh less than 55 pounds are just one piece of the puzzle. The harder task will be determining what to do with larger drones that boast much greater capability than their smaller counterparts.

While the proposed rules for small drones essentially work to keep them from interfering with active airspace, larger drones “will have to be incorporated and integrated into the national airspace,” Johnson says. “That’s the challenge: figuring out how to get basically a flying robot to communicate with air traffic control and other aircraft, and to take appropriate action when necessary to deviate from course or avoid a collision or a near miss.”

For these larger drones, the FAA’s top concern will be airspace encroachment. “They’ve got reports on file from several pilots of all different-size aircraft reporting drone aircraft in the vicinity of air fields,” French says. “These things have the capability to get up into pattern altitudes for standard aircraft, which is a huge exposure for all involved.”

The larger the aircraft, the more risk associated with it, says French, who anticipates requirements for specific training along the same lines of aviation type ratings for aircraft that weigh more than 12,500 pounds now. “If the UAV exceeds a certain weight, the FAA is probably going to want to see a little more detailed training—a little stricter requirements for operators of the larger equipment than you would need for a three-five pound unit,” he says.

“I expect you’ll see small drone rules in place before you even see a proposal for large ones,” Johnson adds. “But the little ones are proliferating at an alarming rate. I think [the FAA] is doing it in the right order. Honestly, even though the industry is demanding faster faster faster, I’m not sure they can go any faster and keep it straight.”

Jacquelyn Connelly is IA senior editor.