Terrorism and Cyclone Insurance (Payments) Direction 2025
I, Daniel Mulino, Assistant Treasurer and Minister for Financial Services, give the following direction to the Australian Reinsurance Pool Corporation.
Dated 3 June 2025
Dr Daniel Mulino
Assistant Treasurer
Minister for Financial Services
Contents
Part 1—Preliminary
1 Name
2 Commencement
3 Authority
4 Definitions
Part 2—Direction to make payments
5 Payments to the Commonwealth
Part 1—Preliminary
1 Name
This instrument is the Terrorism and Cyclone Insurance (Payments) Direction 2025.
2 Commencement
(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.
Commencement information |
Column 1 | Column 2 | Column 3 |
Provisions | Commencement | Date/Details |
1. The whole of this instrument | The day after this instrument is registered. | |
Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.
(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.
3 Authority
This instrument is made under the Terrorism and Cyclone Insurance Act 2003.
4 Definitions
Note: Expressions have the same meaning in this instrument as in the Terrorism and Cyclone Insurance Act 2003 as in force from time to time—see paragraph 13(1)(b) of the Legislation Act 2003.
In this instrument:
the Act means the Terrorism and Cyclone Insurance Act 2003.
Part 2—Direction to make payments
5 Payments to the Commonwealth
(1) Under section 38 of the Act, the Corporation is directed to make each of the following payments to the Commonwealth:
(a) $55 million, as a guarantee fee;
(b) $35 million, as a capital holding fee.
(2) The payments are to be made to the Commonwealth on or before 30 June 2025 by electronic transfer to:
Account name—Department of the Treasury Official Administered Receipts Account
BSB—092‑009
Account Number—918 379
Overview
The Terrorism and Cyclone Insurance (Payments) Direction 2025I was enacted to address a specific shortfall in the funding mechanisms related to terrorism and cyclone insurance, aiming to ensure that the Australian Reinsurance Pool Corporation adequately compensates the Commonwealth for the risks associated with these insurance policies. This notifiable instrument was introduced by Dr Daniel Mulino, the Assistant Treasurer and Minister for Financial Services, under the authority of the Terrorism and Cyclone Insurance Act 2003. The primary objective of this direction is to mandate the Australian Reinsurance Pool Corporation to make two significant payments to the Commonwealth: $55 million as a guarantee fee and $35 million as a capital holding fee, both due by 30 June 2025. These payments are intended to support the ongoing administration and risk coverage of terrorism and cyclone insurance policies, ensuring financial stability and preparedness in the face of potential catastrophic events.
Scope and Application
The Terrorism and Cyclone Insurance (Payments) Direction 2025 applies to the Australian Reinsurance Pool Corporation, directing it to make specific payments to the Commonwealth. The direction is issued under the Terrorism and Cyclone Insurance Act 2003 and defines key terms in accordance with the definitions provided within that Act. The geographic and jurisdictional reach of this direction is limited to the Australian Reinsurance Pool Corporation, a corporation established under Commonwealth legislation. There are no stated exclusions or exemptions in the direction itself, although the Terrorism and Cyclone Insurance Act 2003 may contain provisions that could affect the scope of this direction. The direction mandates that the Corporation must make two payments: a $55 million guarantee fee and a $35 million capital holding fee, to be completed by electronic transfer to the Department of the Treasury on or before 30 June 2025. The commencement of this direction is contingent upon its registration, with the effective date being the day following its registration.
Key Provisions
The Terrorism and Cyclone Insurance (Payments) Direction 2025I, issued by Daniel Mulino, Assistant Treasurer and Minister for Financial Services, provides specific directives under the Terrorism and Cyclone Insurance Act 2003. Section 5(1) mandates the Australian Reinsurance Pool Corporation to remit two payments to the Commonwealth: a guarantee fee of $55 million and a capital holding fee of $35 million. These payments are to be made by electronic transfer to the specified Department of the Treasury account (BSB 092-009, account number 918 379) no later than 30 June 2025, as indicated in section 5(2).
The obligations under this direction are clear and straightforward. The Australian Reinsurance Pool Corporation must ensure that the specified payments are executed accurately and on time. This includes preparing and submitting the necessary electronic transfer details to the Department of the Treasury by the stipulated deadline. Compliance with these financial obligations is crucial, as the direction aims to facilitate the funding of certain government initiatives under the Terrorism and Cyclone Insurance Act 2003.
Failure to comply with the provisions of this direction can result in significant consequences. While the direction itself does not explicitly state penalties for non-compliance, breaches of similar directives under the Terrorism and Cyclone Insurance Act 2003 can lead to civil or criminal penalties. These may include fines or imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined in the context of the Act and any relevant judicial interpretations.