A collective insurance scheme to pay for natural catastrophe damage in the Asia-Pacific region has been proposed by the Japanese Government, the World Bank and the Asian Development Bank.

Funding for the scheme would come from premiums collected in those countries taking part in the proposal.

A similar sovereign insurance pool scheme has been created in the Caribbean, where 16 countries have joined the Caribbean Catastrophe Risk Insurance Facility (CCRIF), which offers $US100 million ($98 million) of cover for each event.

In the 2011 financial year, the CCRIF raised $US112 million ($110 million) from premiums and World Bank donations.

Its exposure for the year was $US620 million ($608 million) and it bought $US111 million ($109 million) of reinsurance from a number of the major reinsurers.

Officials involved in the Asia-Pacific proposal have set a maximum payout of $US120 million ($118 million) for each disaster.

It is expected at least 15 South Pacific island nations, including Fiji, Tonga, Samoa and PNG, will participate with the scheme that could start as early as November next year.

It is also expected Australian and NZ governments would make a contribution to the scheme with some members of the European Union said to also be looking at providing finance.

Japan wants the 10 members of the Association of Southeast Asian Nations to take part in the scheme. Coverage for this area could be implemented in 2015.

The Asian Development Bank says Asia accounts for about 40% of the natural disasters areas of the world.

The Japanese Government is planning to include a contribution to the scheme in next year’s national budget. Agreement to launch the scheme is tipped to take place at the sixth Pacific Islands Leaders Meeting in Okinawa next May.