The Auditor-General, Grant Hehir has concluded an independent performance audit of the Australian Reinsurance Pool Corporation (ARPC) and released the findings om a report titled, Management of the Terrorism Reinsurance Scheme.
The objective of the audit was to assess the effectiveness of ARPC’s management of the Terrorism Reinsurance Scheme by addressing two criteria:
1. Are there processes in place that support the effective administration of the scheme?
2. Do governance arrangements enable the effective oversight and management of the scheme?
The audit scope included:
• policy approval and policy management processes, claims management processes and supporting policy and process documents;
• governance arrangements, including of the Board and supporting committees, and risk management;
• stakeholder engagement activities; and Auditor-General Report No.48 2018–19 Management of the Terrorism Reinsurance Scheme 8
• monitoring and review of scheme performance, including the Department of the Treasury’s (Treasury) assessment of economy in providing the scheme.
The audit found that the ARPC has effective processes for reviewing and collecting premiums, as well as assessing whether the scheme’s participation requirements are being met. Suitable processes for assessing and paying claims have also been established, although these have not been implemented in practice as no claims have been paid against the scheme to date.
The report concluded that ARPC’s governance arrangements enable effective oversight and management of the scheme. Since the commencement of the scheme, mandated triennial reviews have confirmed the need for the scheme to continue. ARPC provides effective annual reporting of its performance.
The report states, “The ARPC Board is effective in overseeing the scheme, ARPC has a suitable organisational structure in place to support the operation of the scheme, and has appropriate arrangements for engaging and communicating with stakeholders.”