Pool Re will hold an extraordinary general meeting on November 21 to consider UK Treasury proposals to reform the British terrorism pool.

Its board recommends members approve the changes after it secured “material improvements” to the original offer.

Treasury was seeking a five-fold increase in fees for the unlimited guarantee it provides the scheme, according to reports.

But Pool Re says the current proposals “require no change” in premium rates charged to members.

Currently the premium paid by member companies is split with 90% going to Pool Re and 10% taken by Treasury.

insuranceNEWS.com.au understands that while the premium will not be altered under the new proposals, the proportion going to Treasury will increase.

Pool Re is a mutual insurer, set up in 1993 in response to the IRA bombing campaign, and most UK insurers offering commercial property cover are members.

In the event of a terrorism loss insurers pay up to an individually determined threshold before claiming on Pool Re’s reserves of £5.5 billion ($10.13 billion).

The unlimited government guarantee kicks in only when those reserves are exhausted.

Under the new proposals payments to Treasury will still be offset against any future drawdown, while modernisation plans are included to enable Pool Re to “adapt to today’s environment”.

Chairman Anthony Latham says Pool Re is a successful partnership that has endured for more than 20 years.

“The benefits of this partnership to the insurance industry and ultimately to businesses across the UK, together with the prospect of the modernisation of Pool Re, justify the board’s recommendation to members to accept… Treasury’s proposals.”

A Treasury spokesman told insuranceNEWS.com.au the Government is committed to ensuring businesses have access to affordable terrorism cover.

“Pool Re’s board and the Government have now agreed a package of reforms that provides for fair and proportionate compensation for taxpayers for their continued guarantee, and a good deal for insurer members of Pool Re,” he said.