Terrorism Insurance (Payments) Direction 2019

Overview

The Terrorism Insurance (Payments) Direction 2019, issued by Stuart Robert, Assistant Treasurer, is an instrument made under the Terrorism Insurance Act 2003. The Direction was enacted to address the financial obligations of the Australian Reinsurance Pool Corporation to the Commonwealth. This legislation is a notifiable instrument, reflecting its regulatory impact and the importance of its provisions. The Direction was issued to ensure the timely payment of fees and dividends as stipulated in the Act, thereby facilitating the smooth operation of the terrorism insurance framework in Australia. The policy objective is to ensure that the financial commitments under the Terrorism Insurance Act are met, thereby supporting the broader objective of providing adequate insurance coverage for terrorism-related risks. The Terrorism Insurance (Payments) Direction 2019 mandates the Australian Reinsurance Pool Corporation to remit a combined fee of $90 million and a temporary dividend of $10 million to the Commonwealth by 31 March 2019. These payments are crucial for the financial stability and operational efficacy of the terrorism insurance scheme, ensuring that the Commonwealth receives the necessary funds to fulfil its obligations under the Act. This Direction underscores the commitment of the Australian government to maintain a robust terrorism insurance framework that can effectively support businesses and individuals in the event of a terrorist attack.

Scope and Application

The Terrorism Insurance (Payments) Direction 2019 is an instrument issued under the authority of the Terrorism Insurance Act 2003, specifically by Stuart Robert, the Assistant Treasurer. It mandates the Australian Reinsurance Pool Corporation to make specified payments to the Commonwealth. Commencing the day after its registration, the Direction requires the Corporation to remit $90 million as a combined fee and $10 million as a temporary dividend to the Commonwealth, payable by electronic transfer to the Department of the Treasury by 31 March 2019. This Direction applies exclusively to the Australian Reinsurance Pool Corporation and its financial obligations towards the Commonwealth, operating within the parameters set by the Terrorism Insurance Act 2003. The Direction does not extend to other entities or industries, and its applicability is strictly confined to the payments outlined, with no stated exclusions or exemptions. Any broader application or modifications would need to be addressed through subsequent legislative instruments or amendments.

Key Provisions

The Terrorism Insurance (Payments) Direction 2019 (hereinafter referred to as the Direction) outlines specific financial obligations imposed on the Australian Reinsurance Pool Corporation (ARPC) under the Terrorism Insurance Act 2003. Section 5 of Part 2 of the Direction mandates that the ARPC must make two distinct payments to the Commonwealth. The first payment is a combined fee of $90 million, and the second is a temporary dividend of $10 million. These payments are to be completed by 31 March 2019, and must be made via electronic transfer to a designated account with the Department of the Treasury. The direction clearly specifies the account details, including the BSB number and account number, to ensure the payments are directed accurately. The Direction imposes a clear and unequivocal obligation on the ARPC to disburse the specified amounts to the Commonwealth within the stipulated timeframe. The authority to make such a direction is grounded in Section 38 of the Terrorism Insurance Act 2003. This legislative framework ensures that the financial obligations are legally binding, thereby providing certainty and enforceability to the payments required. The Direction does not leave room for ambiguity regarding the nature or timing of these payments, ensuring compliance with the legislative mandate. Breach of the obligations outlined in the Direction may have significant legal consequences. While the Direction itself does not explicitly detail the penalties for non-compliance, the underlying Act provides a framework for enforcement. Under the Terrorism Insurance Act 2003, failure to adhere to the provisions of a direction issued under Section 38 could be considered a breach of the Act, potentially leading to civil or criminal sanctions. The exact penalties may vary based on the specific breach and the discretion of the court, but they could include fines or other legal repercussions that are commensurate with the severity of the non-compliance.