Canberra takes $175 million from Australian Reinsurance Pool

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14 May 2012

The Federal Government will take $175 million from the Australian Reinsurance Pool Corporation (ARPC) in 2012/13 in a $100 million special dividend and a $75 million annual dividend.

Papers from last week’s Federal Budget show the Treasury expects to draw a $75 million dividend from the corporation annually for the next four years, starting in 2012/13.

The ARPC was established in 2003 in response to the September 11 2001 attacks on the US World Trade Centre, after which terrorism cover became generally unavailable.

A review of the Terrorism Insurance Act earlier this year recommended the Government receive dividends from the ARPC as compensation for guaranteeing the corporation’s liabilities.

Treasury will also take a $200 million special dividend from the Export Finance and Insurance Corporation.

The Budget papers say this will come from excess capital reserves.

“EFIC’s capital adequacy ratio is well above its internal benchmark, and payment of this dividend will not affect EFIC’s ability to meet its core business requirements,” the Budget papers say.