NIBA backs retention of terrorism pool
NIBA has backed the ongoing operation of the national mandatory terrorism insurance scheme.
In a response to a Treasury request for industry comment on the scheme, NIBA CEO Noel Pettersen says there is still insufficient capacity at reasonable prices.
The Australian Reinsurance Pool Corporation (ARPC) was set up in 2003 after insurers around the world dropped terrorism cover. It provides reinsurance cover for terrorism risk relating to commercial property and infrastructure.
“The continuation of the scheme can also be justified on the basis that a mandatory scheme keeps costs down,” Mr Pettersen said. “If the Government decided to retreat from a mandatory scheme, there is a fear that over time the pool would reduce and cause additional or higher levies to be imposed.”
At June 30 last year the ARPC held $456.6 million in reserves, leading NIBA to recommend a reduction in the terrorism levy on premiums.
A Government review of the scheme is due in July.
In a response to a Treasury request for industry comment on the scheme, NIBA CEO Noel Pettersen says there is still insufficient capacity at reasonable prices.
The Australian Reinsurance Pool Corporation (ARPC) was set up in 2003 after insurers around the world dropped terrorism cover. It provides reinsurance cover for terrorism risk relating to commercial property and infrastructure.
“The continuation of the scheme can also be justified on the basis that a mandatory scheme keeps costs down,” Mr Pettersen said. “If the Government decided to retreat from a mandatory scheme, there is a fear that over time the pool would reduce and cause additional or higher levies to be imposed.”
At June 30 last year the ARPC held $456.6 million in reserves, leading NIBA to recommend a reduction in the terrorism levy on premiums.
A Government review of the scheme is due in July.