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Title

TERRORISM INSURANCE BILL 2002

Report from Main Committee

Database

House Hansard

Date

27-03-2003

Source

House of Reps

Parl No.

40

Electorate

 

Interjector

 

Main Committee/Federation Chamber

 

Page

13823

Party

 

Presenter

 

Status

Final

Question No.

 

Questioner

 

Responder

 

Speaker

 

Stage

Report from Main Committee

Type

 

Context

Bills

System Id

chamber/hansardr/2003-03-27/0128


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Thursday, 27 March 2003
Page: 13823

Bill returned from Main Committee with amendments, appropriation message having been reported; certified copy of the bill and schedule of amendments presented.

Ordered that this bill be considered forthwith.

Main Committee's amendments—

(1) Clause 3, page 2 (after line 12), after the definition of eligible insurance contract, insert:

eligible property means the following property that is located in Australia:

(a) buildings (including fixtures) or other structures or works on, in or under land;

(b) tangible property that is located in, or on, property to which paragraph (a) applies;

(c) any other property prescribed by the regulations.

Note: Roads, tunnels, dams and pipelines are examples of eligible property.

(2) Clause 3, page 2 (line 20), omit the definition of insurance.

(3) Clause 3, page 2 (after line 22), after the definition of member, insert:

own, in relation to eligible property, includes:

(a) owning the property together with another person or other persons; and

(b) having an insurable interest in the property.

(4) Clause 3, page 2 (line 26), omit “30 June”, substitute “1 July”.

(5) Clause 3, page 2 (line 28) to page 3 (line 6), omit the definition of underlying property.

(6) Clause 6, page 5 (lines 25 to 28), omit subclause (7), substitute:

(7) A reduction percentage must be specified if the Minister considers that, in the absence of a reduction percentage, the total amounts paid or payable by the Commonwealth under section 35 (including amounts not related to the act or acts specified in the declaration) would be more than $10,000 million.

(7) Clauses 7 and 8, page 6 (line 5) to page 7 (line 34), omit the clauses, substitute:

7 Eligible insurance contracts

(1) A contract of insurance is an eligible insurance contract to the extent that it provides insurance cover for one or more of the following:

(a) loss of, or damage to, eligible property that is owned by the insured;

(b) business interruption and consequential loss arising from:

(i) loss of, or damage to, eligible property that is owned or occupied by the insured; or

(ii) inability to use eligible property, or part of eligible property, that is owned or occupied by the insured;

(c) liability of the insured that arises out of the insured being the owner or occupier of eligible property.

(2) A contract covered by subsection (1) is not an eligible insurance contract to the extent to which it is:

(a) a contract of reinsurance; or

(b) prescribed by the regulations for the purposes of this subsection.

(3) A contract of insurance is not an eligible insurance contract if it is made in the course of State insurance not extending beyond the limits of the State concerned.

(4) This section extends to contracts made before the commencement of this section.

8 Effect of terrorism exclusions in eligible insurance contracts

(1) 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.

(2) For the purposes of subsection (1), terrorism exclusion means an exclusion or exception (however described) for:

(a) acts that are described using the word “terrorism” or “terrorist” or words of similar effect; or

(b) other acts (however described) that are substantially similar to terrorist acts as defined in section 5.

(3) If:

(a) apart from this subsection, an amount (the base amount) would be payable under the contract, solely because of this section, in respect of a declared terrorist incident; and

(b) a reduction percentage applies to the declared terrorist incident; and

(c) if the contract was made on or after 1 October 2003—the insurer is reinsured with the Corporation in respect of the whole or a part of the insurer's liabilities under the contract that arise solely because of this section;

then the base amount is to be reduced by the reduction percentage.

(4) The Corporation is liable to compensate an insurer for:

(a) a liability incurred by the insurer under a protected contract, to the extent that the liability arises solely because of this section; and

(b) expenditure incurred by the insurer in connection with, or arising from, the assessment, management, conduct, rejection, defence or settlement of a claim by the insured, to the extent to which the claim is:

(i) under a protected contract; and

(ii) in respect of a liability that arises (or is alleged to arise) solely because of this section.

For the purposes of this subsection, protected contract means an eligible insurance contract that is in force at the startup time or is entered into after the startup time and before 1 October 2003.

(8) Clause 35, page 19 (lines 18 and 19), omit subclause (2).

Question agreed to.

Bill, as amended, agreed to.