Legislative Assembly for the ACT: 2002 Week 11 Hansard (26 September) . . Page.. 3283..
MR STANHOPE (continuing):
been unable to obtain reinsurance for acts of terrorism from any reputable international reinsurer for the premium year which commenced on 1 July 2002.
Mr Speaker, there is little prospect of reinsurance cover for acts of terror becoming available for CTP insurance in the foreseeable future. Without such offsetting cover, it is unlikely that any insurer would be prepared to operate in circumstances where it was, itself, fully exposed to claims for acts of terrorism. Indeed, it is most unlikely that the Australian Prudential Regulatory Authority, which is responsible for regulating the insurance industry, would be prepared to let any insurer do so.
As was also done with workers compensation, the government offered a temporary indemnity to NRMA Insurance Ltd in respect of the ACT CTP scheme. However, it was made clear to NRMA that this was only viable as a short-term solution pending the passage of legislation designed to provide a longer-term solution. The Civil Law (Wrongs) Amendment Bill 2002 is intended to provide that longer-term solution. It proposes that there will be no right of action for death or injury arising out of the use of a motor vehicle if the death or injury is caused by an act of terrorism committed before 1 October 2004.
The effect of this bill is that there will be no right of action for death or injury against the owner or driver of a motor vehicle who is innocently caught up in an act of terrorism, or against his or her insurer. The approach adopted in this bill is consistent with the approach adopted in Queensland and New South Wales, the two other jurisdictions in Australia where CTP insurance is underwritten by private insurers.
The bill provides for two exceptions. Firstly, someone responsible for committing or promoting an act of terrorism using a motor vehicle will remain liable to civil action for any injury or death caused by it. This would, of course, be in addition to the full sanctions of the criminal law available to the courts. Secondly, the exclusion of a right of action proposed by the bill will not affect workers compensation entitlements under the Workers Compensation Act 1951 or under corresponding Commonwealth, state and territory laws. This exception is intended to maintain consistency with the Workers Compensation (Acts of Terrorism) Amendment Act 2002 passed by the Assembly in June 2002.
While the solution proposed in the bill provides the certainty which the ACT CTP scheme needs to continue to operate in the current environment, it is not intended to be a permanent solution. To encourage the return of reinsurers to the market and to encourage NRMA Insurance Ltd to endeavour to obtain reinsurance for acts of terrorism on commercial terms, the bill has been given a finite life. The amendments will therefore expire on 31 December 2004.
The two-year period provided for in the bill will give NRMA Insurance Ltd's reinsurers time to assess the real risks that they face and return to the market with an effective and financially viable product for the territory's CTP scheme. During this period, the government will monitor the relative positions of both NRMA, as the CTP insurer, and the reinsurance market. I commend the bill to the Assembly.