Partial reimbursement of insurers from Terrorism Re-insurance Fund
239AH Partial reimbursement of insurers from Terrorism Re-insurance Fund
If a declaration has been made under section 239AD, an insurer may apply to the Authority for reimbursement of part of the amount paid by the insurer in respect of claims arising from the act of terrorism specified in the declaration.
The Authority may, in accordance with this section, reimburse an insurer who makes an application under subsection (1).
Any such reimbursement is to be made out of the TRF.
The Authority may reimburse an insurer only if it is satisfied that—
the insurer has made the payments specified in the insurer’s application for reimbursement, and
the payments were made in respect of claims (whether because the insurer is a self-insurer or under policies of insurance issued or renewed by the insurer) arising from the act of terrorism specified in the declaration under section 239AD, and
the amount to be reimbursed is no more than the total amount paid by the insurer in respect of those claims less the amount of the insurer’s excess.
The Authority may—
make an interim calculation of an insurer’s proportion of the threshold amount, and
make an interim reimbursement (or reimbursements) to an insurer,
on the basis of initial information provided by the insurer to the Authority under section 239AF, and may make further calculations or reimbursements (or both) on the basis of any further or revised information provided under that section.
In this section—
insurer’s excess means the greater of the following—
the insurer’s proportion of the threshold amount,
the maximum amount that is payable to the insurer under any contract or arrangement for re-insurance in respect of its liability for claims arising from the act of terrorism.
insurer’s proportion of the threshold amount means the amount calculated in accordance with the following formula—
where—
X is the amount of the insurer’s liability in respect of claims arising from the act of terrorism.
Y is the total amount of liability of all insurers in respect of those claims.
Z is the threshold amount.
This Act’s bill:Explanatory memorandum
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