Insurers will not have to fund overseas terror pool
An attempt to force insurers to set up a fund for victims of terrorist attacks overseas will be thrown out of the Commons later this month.
Insurance Times has learned that the Private Member’s Bill introduced by Lord Brennan will return to the Commons on 15 July but will not be considered due to “lack of support”.
There had been fears that the Victims of Overseas Terrorism Bill would require insurers to contribute to a pooling arrangement similar to Pool Re.
A Whitehall source said the Bill was fraught with problems and would be blocked despite an unopposed second reading in the Lords.
A spokesman for the Department for Culture, Media and Sport said: “It is a competitive market. It is not up to the government to tell insurers they should set up a fund. It is about consumer choice.
“What we want is information to be made clear to customers and what is included in the policy. Whether terrorism overseas is included in a policy needs to be set out clearly and customers need to ensure they understand the small print.”
Insurance Times reported in April that despite “sympathy” towards the Bill the government did not want to force insurers to set up a fund.
Lord Davies of Oldham acknowledged in the April debate a “clear disparity” between the support for UK victims of overseas terrorism and that for victims of terrorism in the UK and the need for “urgent action”.
However he said: “We don’t think it’s the government’s role to compel insurers to offer cover.
“We don’t believe that there’s a market failure which warrants the government to intervene. Decisions on price and cover are ultimately commercial ones for the insurer.”