The Terrorism and Cyclone Insurance Act 2003 (TCI Act) was enacted by the Commonwealth Parliament following the events of 9/11 in the US and the withdrawal of terrorism cover by insurance companies globally.
The TCI Act established ARPC to provide insurance cover for eligible terrorism losses in Australia and to perform any other function prescribed in the regulations.
Section 38 provides that the Minister may give directions to ARPC in relation to the performance of its functions and powers. See Ministerial Directions here.
Section 41 of the Act required that at least once every three years the Minister was to prepare a report that reviews the need for the TCI Act to continue. From 2023 onwards, the reviews will be undertaken every five years with the next review due in 2028. The Reviews of the TCI Act may be accessed below. See Triennial Reviews here.
Cyclone Reinsurance Pool Legislation
On 30 March 2022, Parliament passed the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. The Bill received Royal Assent and became law on 31 March 2022.
The Act amended the Terrorism Insurance Act 2003 to establish a framework for a cyclone and cyclone-related flood damage reinsurance pool. It extended the operation of the terrorism reinsurance pool administered by ARPC and amended the title of the Act to the Terrorism and Cyclone Insurance Act 2003. It also amended the Insurance Act 1973 to create a civil penalty for insurers that do not reinsure eligible cyclone risks with the ARPC.