Treasury releases terms of reference for latest Terrorism Insurance Act review

The Treasury has released the terms of reference for the 2021 Triennial Review of the Terrorism Insurance Act 2003 (TI Act).

The TI Act requires a review at least once every three years to test whether market failure for terrorism insurance exists and if the Act should continue. Previous reviews were also used to improve the scheme.

As in previous years, The Treasury is responsible for conducting the 2021 review and preparing a report for ARPC's Minister, The Hon. Michael Sukkar MP, Assistant Treasurer, Minister for Housing, and Minister for Homelessness, Social, and Community Housing.

The terms of reference for this year's Triennial Review focus on:

• whether there continues to be a market failure in the private sector supply of terrorism insurance, and consequently, whether there is a need for the Act to continue;
• whether the governance, administration, and resourcing of the scheme remain appropriate, including interactions between the Cyclone Reinsurance Pool and the Terrorism Reinsurance Pool; and
• whether the risk of cyber terrorism causing physical property damage should be included in the scheme.

Read more: ARPC announces new board members

Australian Reinsurance Pool Corporation (ARPC) has welcomed the terms of reference for the latest Triennial Review of the TI Act. It vowed to support the review and connect stakeholders to the Treasury if it wished to provide input into the review.

“I am pleased to welcome the terms of reference for the 2021 Triennial Review of the scheme and look forward to supporting The Treasury during the Review,” said ARPC chief executive officer Dr Christopher Wallace.

“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.”

Previous reviews completed in 2006, 2009, 2012, 2015, and 2018 found insufficient terrorism insurance available commercially on reasonable terms. They concluded that the Act should continue in operation, subject to further review, in no more than three years.