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(a) For what reasons they would use their power to terminate the Retrocession Agreement between Her Majesty's Treasury and the Pool Reinsurance Company Limited with only 120 days' notice; (b) for how long they intend to keep the Retrocession Agreement in force; and (c) whether they will undertake not to terminate the Retrocession Agreement unless undoubted alternative reinsurance cover is available; and[HL758]
What are their definitions, for insurance purposes, of an act of terrorism and an act of war (whether declared or not); and whether on their definition an act of terrorism can also be an act of war.[HL759]
Lord McIntosh of Haringey: The Government are committed to ensuring the continued availability of insurance cover for damage caused by terrorist attacks on industrial and commercial property in mainland Great Britain. The Retrocession Agreement was made following the decision of commercial reinsurers to limit the cover that they would offer in the UK market-place. The cover that is provided, as defined in Section 2 of the Reinsurance (Acts of Terrorism) Act 1993, deals with the shortfall. The Government act, in effect, as reinsurer of last resort with unlimited liability within the terms of the 1993 Act.
There is no single statutory definition of an act of terrorism or an act of war. Particular cases would have to be considered in light of the applicable statute and the terms of the insurance policies in question.
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