Australian Government updates terrorism insurance framework with new legislation

Australian Government updates terrorism insurance framework with new legislation

11 November 2025

The Australian Government has passed the Criminal Code Amendment (State Sponsors of Terrorism) Bill 2025, which amends the Terrorism and Cyclone Insurance Act 2003 (TCI Act). The amendment aligns the definition of a terrorist act with the Crimes Act 1914, ensuring that coverage under the TCI Act extends to state-sponsored terrorism.

The passage of the legislation reflects the Government's recognition of the evolving threat environment and ensures that the terrorism reinsurance scheme administered by ARPC remains aligned with national security objectives.

Under the amendment, the updated definition of a terrorist act clarifies ARPC's ability to respond to losses resulting from acts involving or supported by foreign state actors, where such acts meet the definition of terrorism under Australian law.

ARPC Chief Executive Dr Christopher Wallace said: "This amendment is an important step in ensuring that Australia's terrorism insurance framework keeps pace with the changing nature of the terrorism risk. It reinforces the Australian Government's commitment to protecting the economy, the domestic insurance industry and policyholders from potential impacts of terrorism, including those backed or orchestrated by foreign state actors."

The terrorism reinsurance scheme, administered by ARPC under the TCI Act, provides protection to commercial property owners, insurers and businesses in the event of a declared terrorist incident.

The amendment does not change ARPC's role or the operation of the scheme but ensures that coverage under the terrorism pool remains comprehensive and aligned with the scope of the definition in law.

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