Legislative Assembly for the ACT: 2003 Week 2 Hansard (4 March) . . Page.. 421 ..
MS DUNDAS (continuing):
Thankfully, this bill has a sunset clause, and that makes it slightly more palatable. I hope that, by the end of 2004, the government is confident that terrorism will no longer be an issue, or that we will have sorted through our insurance issues.
MS TUCKER (10.55): It seems fairly clear from briefings provided to my office, and from the explanatory statement, that there is no reinsurance available throughout the world for acts of terrorism. Without reinsurance, any cost of an act of terrorism caused through the use of or incorporating or involving a vehicle would be covered by a third party insurer in the territory.
Presuming 200,000 vehicles in the ACT pool, then the cost of any destructive act would technically need to be borne by the third party policyholders. Failing that, the cost would have to be borne by the NRMA. That would quickly prove to be beyond its capacity, which would, of course, be in breach of the insurance licence issued by the Australian Prudential Regulatory Authority.
I understand that the ACT government has already put itself in a position to carry the responsibility for the impact of such acts, and that this legislation is effectively a fait accompli. The reality is that any terrorist act, even on a moderate scale, would impact on this community in costs of hundreds of millions of dollars. In that case, as with all disasters of such a scale, all the responsibility would fall back on both the Commonwealth government and the local community.
The definition of "acts of terrorism"is identical with the definition inserted into the Workers Compensation (ACT) Act, which is based on the UK acts. I cannot say I am particularly reassured by the comment in the government's response to the scrutiny of bills report that "it is not envisaged that the definition would apply to ordinary, non-violent, political protest action."If something of the kind, where a political protest results in damage, does occur, and the insurance company seeks to argue that it was an act of terrorism, I guess we will just have to wait and see how the courts respond.
The other feature of this bill is that it will expire two years after coming into force. That is on the presumption, or perhaps in the hope, that reinsurers will re-enter this market and once again provide cover which, at the very least, will be dependent upon no more major terrorism events impacting on the developed world. However, I cannot say that current events encourage such faith in me.
MR HARGREAVES (10.58): The minister has explained in detail why it is important for the Legislative Assembly to pass this bill. I therefore propose to keep my comments as brief as is possible.
I would not be speaking in favour of this bill if it were simply about protecting the interests of the insurance company which underwrites the ACT compulsory third party scheme-CTP insurance. Indeed, I have been critical of the provider of that insurance in the past. Nor would I be standing here now if it was about kowtowing to the interests of the reinsurers based in places like Switzerland and Bermuda. The reason I am speaking in support of this bill is because, without the amendment, the ACT may not have a CTP