§ Mr. CaplinTo ask the Chancellor of the Exchequer if he has authorised the Pool Reinsurance Company Limited to change the terrorism reinsurance premiums in 1999; and if he will make a statement. [55670]
§ Ms HewittI have agreed that premiums in 1999 should, as in 1998, be discounted provided the good claims experience of the past two years continues.
Therefore, from 1 January 1999, the premiums payable for all zones will be discounted by 85 per cent. The discount will be withdrawn if, in the course of the year, significant new claims are notified to Pool Re. This would affect subsequent new or renewed policies.
In addition, other changes to the premium tariff will be introduced which should help simplify the administration of the scheme and reduce its costs.
Arrangements for subsequent years will be determined in the light of experience.
Despite the relatively low level of terrorist activity on the mainland recently, experience has shown that businesses in Great Britain would be well advised to maintain full insurance cover against terrorist damage. This applies whether it is bought through the Government backed arrangements operated by Pool Re or through the alternative arrangements that have been appearing in the insurance market.
923W