The Federal Government will re-examine whether terrorism cover provided by the Australian Reinsurance Pool Corporation (ARPC) should include property damage from cyber attacks after a previous review determined it is not required.

The Terrorism Insurance Act is reviewed every three years to determine if the ARPC is still required, with the process providing opportunities for improvements and changes to be made to the scheme.

Terms of reference for this year’s review were released on Friday, with submissions due by July 30.

“The triennial review is an important process for making sure ARPC remains fit for purpose, so I strongly encourage ARPC stakeholders to make submissions through the Treasury process,” CEO Christopher Wallace said.

The previous review decided against extending the ARPCs cover to include property damage caused by terrorism-related cyber events, finding no evident market failure.

But an ARPC research report last year, which drew on work commissioned from the Organisation for Economic Co-operation and Development and Cambridge University’s Centre for Risk Studies, identified a market gap, while also finding the probability of an incident remains remote.

Additionally, the current review will include implications from plans for the ARPC to administer a government-backed northern Australia cyclone and related flood damage reinsurance pool that is due to start next July.

The consultation paper asks if there are any changes in the governance, administration and resourcing of the terrorism pool or the Terrorism Insurance Act that should be amended in light of potential interactions with the proposed new pool.

The ARPC began operations in 2003, with the scheme intended to only operate while terrorism cover remained commercially unavailable on reasonable terms.

The consultation paper is available here.