Treasury has appointed external consultant Pottinger to help weigh up the future of the Australian Reinsurance Pool Corporation (ARPC).

The corporation is reviewed every three years, but this review has prompted particular focus after the Audit Commission flagged scope for “a gradual Commonwealth exit”.

The Federal Budget in May allocated Treasury $1.2 million to develop options on the pool’s future, including abolishing it if sufficient capacity exists in private terrorism insurance markets.

ARPC CEO Christopher Wallace says the corporation is supporting Treasury and Pottinger in the review, and a discussion paper is expected soon.

“I expect there will be wide-ranging stakeholder consultation,” he told insuranceNEWS.com.au.

This month the Government raised the National Terrorism Public Alert to high from medium.

“The alert level is an important communication so people can be prepared,” Mr Wallace said. “In today’s global context the threat of terrorism is persistent.”

The ARPC was established in 2003 after the September 11 2001 attacks on the US made terrorism cover generally unavailable.