Berkshire Hathaway Specialty Insurance (BHSI) has withdrawn from the Hong Kong Employees’ Compensation (EC) terrorism pool effective 1 December 2018.
This decision benefits all BHSI’s new and existing EC customers for policies incepting or renewing on or after December 1, 2018. BHSI is now the first insurer in Hong Kong to provide EC terrorism coverage to customers directly, backed by Berkshire Hathaway Specialty Insurance Company’s financial strength.
The EC terrorism pool was established to provide terrorism cover for Hong Kong EC policyholders after the September 11th terror events when capacity had receded in the international markets. Whilst participation is voluntary, the pool provides a maximum limit of HK $10 billion which until now was shared among all EC policyholders for all terrorism claims on a “first come, first served” basis.
Insurers participating in the pool must charge their EC policyholders a 3% levy on policy premiums which is then remitted to the Hong Kong SAR Government. According to the terms of the pool, those participating insurers are not obligated to pay EC terrorism claims to their customers until the pool first pays the insurer for the claims.
Effective December 1, the EC terrorism coverage provided by BHSI is no longer subject to any of the pool’s restrictions. BHSI’s customers are no longer subject to the 3% levy on their EC policy premiums; BHSI policyholders no longer need to share a limit with all the other EC policyholders in Hong Kong; and payments for terrorism claims are no longer contingent upon payment or reimbursement from the pool.
BHSI Hong Kong CEO Marc Breuil said: “The feedback from the customers and brokers we have discussed our approach with has been incredibly encouraging.
“BHSI’s Employees’ Compensation policies are now exclusively backed by its own financial strength – which carries the same S&P rating as the Hong Kong SAR Government – and provide EC terrorism coverage to policyholders without the obligation to pay the levy.
“We are excited to offer this market-changing coverage development to our current and future EC customers.”
Source: Company Press Release