Assistant Treasurer Josh Frydenberg has hinted the Federal Government will not axe the Australian Reinsurance Pool Corporation (ARPC).

He told the Insurance Council of Australia’s regulatory seminar last week the terrorism reinsurance scheme came into play for the first time during December’s siege at the Lindt café in Sydney.

The Federal Government sought advice from the ARPC, although there is unlikely to be any claim on the pool.

A Treasury review of the scheme, conducted every three years, is pending.

The Audit Commission last year recommended the scheme be wound down because there is sufficient capacity in private terrorism insurance markets.

Mr Frydenberg says the industry will be consulted on the review before the middle of this year. The strong relationship between the industry and government has been crucial following the Sydney siege, he says.

“Cover for damage to commercial buildings and business interruption losses is vital for the strength of the Australian economy under all circumstances. The Government supports terrorism insurance provision by making sure reinsurance is available to insurers through the ARPC, which is backed by a $10 billion Commonwealth guarantee.”