ARPC increases terrorism levy see some premiums rise
A recent Treasury review recommended the premiums charged by the Australian Reinsurance Pool Corporation (ARPC) be increased.
As a result, some insurers insurance premiums for Commercial Property and Business Interruption have been increased from 1 April 2016.
The increases apply across three tiers: Tier A, applying to CBD areas with populations over 1 Million, Tier B, for urban areas with population under 100,000 and Tier C for everywhere else.
Vero Insurance and Allianz new premium rates increases are:
Tier A : 4%
Tier B : 1.3%
Tier C: 1%
What is the ARPC
The Australian Reinsurance Pool Corporation is a public financial corporation established under the Terrorism Insurance Act 2003 (TI Act), being subject also to requirements under the Public Governance, Performance and Accountability Act 2013 (prior to 1 July 2014, the Commonwealth Authorities and Companies Act 1997.) Following the terrorist events that occurred in the United States of America on 11 September 2001, there was a global withdrawal of terrorism insurance. This was of particular concern to the commercial property sector internationally. The Government was concerned that the lack of comprehensive insurance cover for commercial property or infrastructure would lead to a reduction in financing and investment in the Australian property sector. The role of ARPC was to establish and subsequently provide ongoing administration of, a scheme that would provide insurance cover for eligible terrorism losses, involving commercial property, associated business interruption losses and public liability.
