Berkshire Hathaway Specialty Insurance Company (BHSI) has pulled out from the Hong Kong Employees’ Compensation (EC) terrorism pool.
Now, the insurer will offer EC terrorism coverage to customers directly in Hong Kong, thereby becoming the first underwriter to offer services in Hong Kong.
After exiting the EC terrorism pool, the coverage provided by BHSI will no longer be subject to the levy on policy premiums as it is free from any of the pool’s restrictions.
As a result, the BHSI’s customers will not be required to pay the 3% levy on their EC policy premiums. Also, 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.”
After September 11th terror attacks, the EC terrorism pool was set up to provide terrorism cover for Hong Kong EC policyholders when capacity had receded in the international markets.
Insurers participating in the pool are required to collect a 3% levy on policy premiums from their EC policyholders which is then remitted to the Hong Kong SAR Government.
As per the terms of the pool, participating insurers are not required to pay EC terrorism claims to their customers until the pool first pays the insurer for the claims.