Claims ProcedureWhat happens in the event of a potential terrorism loss?
What should insurers do?
- In the event of a potential terrorism loss, all insurers should immediately assess any claims under the terms of the original policy.
- Take note of any declared terrorist incident (DTI) formally announced by the Minister.
- Be aware of the operation of the Terrorism Insurance Act 2003 in the event of a DTI.
There are three main aspects of the Act if a DTI occurs:
- A terrorism exclusion in an eligible insurance contract has no effect in relation to a loss or liability to the extent to which the loss or liability is an eligible terrorism loss. Refer section 8 of the Act.
- The Minister may nominate a reduction percentage, indicating how much of each terrorism claim is to be paid.
- The ARPC reinsurance arrangements are triggered.
- Terrorism insurance claims are to be managed by the reinsured and notified to ARPC in accordance with the provisions of the reinsurance agreement.
Claims Management
If a DTI is announced, it is the responsibility of the reinsured to assess, adjust and pay any terrorism claims on eligible policies in accordance with the original policy terms and conditions.
Claims Notification
The reinsurance agreement obliges the reinsured to advise ARPC as soon as possible of any circumstances likely to give rise to a claim together with an estimate of ARPC’s liability and thereafter keep ARPC fully informed of any developments regarding the claim. Please use RISe for this purpose.
Claims Settlement
All terrorism claims settlements made by the reinsured should be included in the claims template available for download from RISe. The template is then uploaded into RISe.
