By order of the secretary of the air force air force instruction 22 november incorporating change 1, 30 september personnel. requires AF Form 10 to be forwarded to HQ AFPC or HQ ARPC on separation ( Table A); third and fifth digits; for example Completed DD Form (Application for Retired Pay Benefits), enclosed. • Completed DD Form .. BRISTOL STREET. HAWKINS .. anniversary year. The ARPC Form E (Chronological Statement of Retirement Points) for current.
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Subsection 9 3 of the Act provides that the report is to be tabled in each House of the Parliament as soon as practicable. The appointments of Mr Lumsden, Ms Micalizzi and myself are all for terms of three years from 1 July Her guidance and counsel have been invaluable.
She has held senior positions in the industry, including with Aon Re and the Employers Reinsurance Corporation. Her managerial background, as well as her involvement in the design and delivery of professional development courses for reinsurance practitioners, will assist ARPC in further building on its success to date in administering a sound and financially viable terrorism reinsurance scheme in Australia.
Mr Vogt was appointed on 29 August for a three year term and I look forward to working with him in the years ahead.
Annual Report – Australian Reinsurance Pool Corporation
His two year term expired on 30 June and the Members resolved to reappoint him for a further two year term. In consultation with the Chief Executive and Treasury, we intend to further and consolidate those contacts in the year 1233.
Substantial work has gone into ensuring that the scheme and ARPC are well known in the marketplace. The extensive speaking program by the Chief Executive and Client Service Manager has been maintained at various forums including industry associations, radio, state and Commonwealth authorities and presentations to individual insurers. ARPC has also continued its advertising fform in industry journals both in Australia and overseas.
As a result, ARPC has substantial industry coverage. As at 30 June it had received premium from clients. I wish to thank my fellow Members and the Foem Executive for their assistance in ensuring that the scheme is well publicised and administered and that we have sound corporate governance structures in place. I look forward to working with the Members and staff of ARPC to fofm that we build on the work done to date in establishing the scheme, growing the pool and developing sound administrative and governance practices.
ARPC has now completed its second successful year of operation. A significant amount has been achieved in that short time and client numbers continue to grow steadily.
It is critical that insurers, both in Australia fkrm overseas, are aware of the scheme and their obligations under it. To this end, ARPC will continue its marketing and advertising campaign. This will include overseas insurers and industry associations as appropriate. Gorm part of its client communication strategy, ARPC introduced a newsletter which it publishes quarterly and forwards to clients by email.
The intention in is to publish the newsletter on the website. This will give anyone interested in ARPC, its operations ofrm its product easy access to information on relevant issues.
In the 1233 year of the scheme insurance companies invested considerable time and effort to adjust their information technology systems to cater for the three tier premium bands, issue renewal notices and report exposures and premium.
During ARPC introduced a cedant review program. Its intention is to assist clients to meet their obligations under the reinsurance agreement. The philosophy behind the program is to further strengthen the relationship between ARPC and its clients by increasing awareness of the processes involved in premium calculation and remittance.
I wish to thank all clients who have been involved in the review program. The co-operation afforded to our review team is greatly appreciated. The reinsurance agreement provides that clients must report annually on their aggregate exposures by postcode. The second stage of the cedant review program will include a review of the annual aggregate reports. To assist clients in compiling and submitting the annual aggregate reports, ARPC has introduced a web-based facility by which clients can submit the reports.
Any anomalies are notified to the atpc and must be rectified before the report is accepted for submission to ARPC. All clients fprm been provided with an identification number and password together with comprehensive instructions on the use of the risk aggregator system. I am gratified that the system has been accepted fodm and is being used effectively by clients.
In addition to the annual aggregate report, ARPC is investigating other methods by which it can estimate losses in the event of a declared terrorist incident. ARPC has continued to 1233 and refine its corporate governance structures, policies and practices. It has sound structures in place which will be tested and refined as necessary during It began operations on 1 July The scheme was introduced as a result of calls from the community for the Government to intervene in an area of clear market failure and after discussions with key industry stakeholders — including insurance and reinsurance companies, fom, representatives of property owners, industry associations, insurance brokers and actuaries.
ARPC has the power to do all things necessary or convenient to be done for or in connection with the performance of its functions, including:. ARPC also considers that it should be in a position to advise on the magnitude of its probable losses in the event of a declared terrorist incident and, consequently, an appropriate reduction percentage.
The TI Act effectively deems terrorism risk cover arpf eligible insurance contracts by rendering terrorism exclusions clauses void. Aepc companies may reinsure their additional risk with ARPC, as the statutory authority established under the TI Act to administer the scheme.
As terrorism exclusion clauses are 13 ineffective by the TI Act, payouts fkrm to holders of eligible insurance contracts for terrorism losses depend on the underlying coverage in the eligible insurance contract. For example, if a terrorist act caused a fire, then a policyholder would be able to claim for subsequent loss if their insurance policy would normally cover damage from fire. The compulsory application of the legislation to all eligible insurance contracts is essential to allow the accumulation of a credible pool of funds within a reasonable period.
Universal terrorism insurance is also designed to avoid problems fform undiversified risk for example, insuring only high risk buildings and uncertainly as to who will be eligible for compensation in the event of a declared terrorist incident.
Upon that declaration, the provisions of the TI Act in respect of eligible terrorism losses become effective. Risk cover is for any declared terrorist incident, except events involving damage from nuclear causes. Coverage is available for Commonwealth and State business enterprises as well as Commonwealth-owned airports leased frm. Farms benefit from cover for terrorism risk if they hold gorm against business interruption.
The Regulations also exclude certain other types of insurance coverage, including: Insurance companies have the right to reinsure through ARPC the risk of claims for eligible terrorism losses.
Insurers who seek terrorism reinsurance through ARPC retain part of the risk of liability from a declared terrorist incident. The premium charged for reinsurance is determined by Ministerial for.
The premiums have been set having regard to the level of risk. The tiers have been identified by postcode. Any property not on the mainland of Australia or Tasmania, but within the coastal sea of Australia within the definition included in section 3 of the TI Act, is Tier C.
ARPC operates on a commercial basis with premium and investment income used to fund its operations and build the pool available to meet fkrm claims. The TI Act requires that, at least once every three years, the Minister must prepare a report that reviews the need for the Act to continue in operation.
A review of the scheme will be conducted over the next 12 months and from examine the global terrorism risk forj market to assess the state of the market and the possible wind-up strategy for the scheme.
The uncertainty in the market made apc impossible to stipulate on establishment the details or timing of the wind-up of the scheme and the use of funds accumulated in the pool. Components of the scheme, including pricing, classes of insurance required to provide terrorism risk cover and level of underwriting available, are not set in legislation. This inbuilt flexibility is designed to encourage the re-emergence of the commercial market. The Members are appointed by the Minister.
ARPC may also employ those people it considers necessary for the performance of its functions and the exercise of its powers. An organisational chart is attached at Appendix 1.
The financial year represents a significant year for the ARPC. After two years of operation, the financial year represents the first full year of premium collections. This increase was due mainly to the increasing size of the pool. The expense ratio of 3. There have been minimal movements in the collection patterns between tiers A, B and C over the and financial years. This consistent trend between the two financial years is also apparent for the gross written premium collections by State.
It is expected these trends will continue in the foreseeable future.
The reinsurance premiums collected by ARPC are dependent on the underlying premiums charged by its clients. ARPC relies on its clients to return the correct amount in reinsurance premiums. In its first year of operation ARPC concentrated on educating its clients in the operation of the TI Act and designed a premium calculation template for use by clients to minimise the likelihood of errors occurring in the calculation of the reinsurance premiums due.
During ARPC designed and implemented a cedant review program. The first stage commenced in March and is aimed at identifying issues that clients may have meeting their obligations under their reinsurance agreements with ARPC. The key areas addressed in the review include:.
The second stage of the cedant review program will expand the program to include a review of aggregate reporting functionality and issues.
2004-05 Annual Report
Clients have been selected for review in stages one and two based on factors such as premium levels, ceding history, previous issues raised frm ARPC and domicile. ARPC measures itself against the objectives both financial and non-financial identified in its business plan. The business planning process is conducted towards the dorm of each financial year and measures the outcomes from the current year and sets targets for the coming financial year. The business plan is presented to the Members for discussion and endorsement at their last meeting in the current financial year, which is usually scheduled for the last week in June.
ARPC has developed a balanced scorecard as a means of measuring its financial and non-financial performance. The components of the balanced scorecard are:. The balanced scorecard is produced and issued monthly. During its first year of operation,ARPC achieved substantial market coverage. Of these, clients representing A number of companies have entered into reinsurance agreements with ARPC but do not remit premium. If a company has a contract of reinsurance with ARPC and incurs a liability solely because of section 8 of the TI Act, it is entitled to cover under the reinsurance agreement provided it complies with the terms of the agreement and pays the relevant premium foorm or not it was obvious or apparent that the contract under which it incurs a liability was an eligible insurance contract under the TI Act.
Since its inception ARPC has undertaken an extensive public awareness campaign to ensure that all insurers are aware of the scheme and their obligations under it and to offer reinsurance contracts to all those insurers who write eligible insurance contracts. The public awareness campaign includes initiating and maintaining contact with industry bodies, delivering presentations and addresses to industry bodies and individual insurers and conducting an extensive advertising campaign both in Australia and overseas.
ARPC will continue to communicate its offer of reinsurance to the market by giving presentations to local bodies such as the Insurance Council of Australia, Reinsurance Discussion Group, the Australian and New Zealand Institute of Insurance and Finance and at other forums it considers appropriate.
Contact with foreign insurers and captives has been made by fork of industry advertisements and presentations given to overseas markets and brokers.
The market will be kept informed of any changes to the scheme and ARPC will fork feedback from clients on the scheme and any improvements the market considers should be implemented. All Members are appointed by the Minister.