Australia’s corporate risk managers have rejected the Federal Government’s plan to introduce a compulsory terrorism insurance levy, saying it’s totally unfair.

Association of Risk and Insurance Managers of Australasia (ARIMA) President Brad Greer says risk managers are pleased the Government has stepped in to fill the gap left by commercial insurers. But he says they want the choice of buying cover or self-insuring the risk.

Mr Greer says Australia’s high insurance taxes – fire services levies, GST and stamp duties – are enough for insurers to deal with, and the proposed Terrorism Insurance Bill’s additional levy is unnecessary.

“The Government must understand not every risk manager wants to purchase insurance as a hedge against terrorism risks,” he said. “Many have analysed their risk management programs and are happy to self-insure.”

Mr Greer says the Bill also fails to address assets located outside Australia. “Many organisations buy umbrella policies which cover a range of assets, many of which may be offshore,” he said. “They will pay the levy, despite the fact that the insurance pool will fund terrorism losses in Australia only.”

He said the Government has not stated whether fire services levies, GST and stamp duties will be added before or after the terrorism levy. Insurance buyers could pay a tax on a tax on a tax on a tax, bumping premiums up considerably.