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Legislative Assembly for the ACT: 2002 Week 7 Hansard (6 June) . . Page.. 1987 ..

MR CORBELL (continuing):

I am sure that everyone in our community was shocked at the events which took place in New York on 11 September last year. I am equally sure that at that time most of us were unaware of the full implications that would flow from that act of terror.

Mr Speaker, the impact of the terrorist attacks did not take long to find their way to Australia. On 1 November last year the Insurance Council of Australia contacted the ACT government to inform us that, as of 1 January this year, reinsurance for acts of terror would no longer be available to general insurers.

The withdrawal of reinsurance would have an immediate and potentially catastrophic impact on the workers compensation scheme. An inability to reinsure the full range of risks encompassed by this statutory class of insurance would render each of the territory's approved insurers incapable of complying with their obligations to the scheme and, through it, to injured workers.

The government, in consultation with other state and territory jurisdictions and the Commonwealth government, immediately set about commencing discussions with the Insurance Council of Australia in order to resolve both the immediate and the ongoing threat to the continuation of the scheme.

With a problem of this size and complexity, the government's preferred option was for the Commonwealth government to take the leadership role in this important area and provide a national solution to the problem. Unfortunately, after initial indications that it would do so, in early December last year the Commonwealth withdrew its involvement and effectively left the resolution of this important issue to each individual state and territory.

Given the short period of time between the indecision of the Commonwealth of this matter and the real-time withdrawal of cover, the ACT government wrote to the Insurance Council of Australia offering a short-term solution to maintain the scheme operation until a longer term solution could be found. Mr Speaker, the bill I have tabled today is that long-term solution.

The Workers Compensation (Acts of Terrorism) Amendment Bill 2002 is designed to protect the integrity of the ACT workers compensation scheme. Mr Speaker, at the outset I must state that the probability of the ACT and its work force being subjected to an act of terror is remote. However, as we witnessed in New York, we can no longer assume that it cannot or will not happen here.

The bill deals with what is effectively the breakdown in the financial relationship between our approved insurers and the reinsurance industry. The effect of the bill will be to have the territory stand as the reinsurer in case of an act of terror. It will do this by the creation of a fund. The purpose of the fund is to ensure that injured workers are able to receive their entitlements if their injuries are sustained due to an act of terror.

Unlike the current workers compensation supplementation fund, the terrorism fund will not be required to exist permanently. In fact, the terrorism fund will only come into existence once three separate triggers have been activated. The three triggers that need to be activated are: an act of terror as defined in the bill has occurred; the affected approved insurer(s) had approached and made the maximum demand possible on their own

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