Australian Reinsurance Pool Corporation (ARPC) welcomes the final report of the 2021 Triennial Review into the Terrorism Insurance Act 2003 (TI Act), released by the Treasury.
“As a result of the 2021 Triennial Review, the Treasury recommended ARPC continue to provide terrorism re/insurance covering Australian commercial and high value residential property,” said Dr Christopher Wallace, ARPC Chief Executive.
“This will provide confidence to the Australian business sector, the insurance industry and the broader Australian economy, which would rely on ARPC to financially recover from a Declared Terrorist Incident,” Dr Wallace said.
The TI Act requires that a review be conducted once every three years on the need for the ARPC pool to continue. Just like in 2021, previous reviews completed in 2006, 2009, 2012, 2015 and 2018 found there was insufficient terrorism insurance available commercially on reasonable terms and concluded the Act should continue in operation.
“ARPC notes Treasury’s recommendation not to include cyber terrorism in the pool at this time,” Dr Wallace said. This is the second time the Treasury has considered the inclusion of cyber terrorism in the pool.
Dr Wallace acknowledges the Treasury’s recommendation that ARPC’s governance arrangements be reviewed if the proposed Cyclone Reinsurance Pool is implemented, including a potential increase in Board size.
The 2021 Review also recommended that Treasury reviews of the scheme take place every five years, instead of three years.
The full 2021 Triennial Review report and recommendations can be found here.