On 30 September 2025, the Australian Government announced a review of the Terrorism and Cyclone Insurance Act 2003 (Cth) (the Act).

Background

The Act provides the legislative underpinning for the Australian Reinsurance Pool Corporation’s operation of the Terrorism Reinsurance Pool (terrorism reinsurance pool) and Cyclone Reinsurance Pool (cyclone reinsurance pool).

The Act requires the Minister to prepare a report that reviews the need for the Act to continue in operation as soon as practical after 1 July 2025 and at least once every five years after that day. To meet the Minister’s requirement under the Act, Treasury has been tasked to undertake a review considering the need for the Act to continue.

Terms of reference

The review of the Act will consider:

  • Whether there is a need for the terrorism reinsurance pool to continue.
  • Whether the cyclone reinsurance pool is meeting its purpose of improving insurance access and affordability for households, small businesses, and residential and commercial strata with medium to high cyclone and related flood damage risk.
  • Whether the cyclone reinsurance pool is maintaining incentives to reduce and mitigate the risk of eligible cyclone losses.
  • Whether the governance, administration and resourcing of both reinsurance pools remain appropriate including, but not limited to, the level of payments to the Australian Government for fees for the Commonwealth guarantee and dividends.
  • With regard to the findings of the above and any other issues raised, whether there is a need for the Act to continue in operation.

Consultation

Treasury has drafted a consultation paper, informed by the terms of reference, and is seeking responses. Actuarial modelling is also available on the Treasury website.

Next steps

The deadline for comments on the consultation is 11 November 2025.