December 13, 2002 by Canadian Underwriter
The Australian government’s treasurer Peter Costello has put forward a bill before parliament that would see the creation of a government-backed terrorism reinsurance mechanism. The legislation would also ensure that terrorism cover is made available by insurers.
The Terrorism Insurance Bill calls for the creation of a new government body, the Australian Reinsurance Pool Corp., which will provide insurers with reinsurance cover against losses arising from a declared terrorist incident. The financial details of how the scheme would work have not yet been released. Australia joins a growing list of countries, including the U.S., to move toward government-backed insurance facilities against terrorism-related losses. Despite repeated calls by insurers and risk managers to take similar action, the Canadian government remains reluctant to step forward with a reinsurance scheme.