Berkshire Hathaway exits Hong Kong EC terrorism pool
Berkshire Hathaway Specialty Insurance Company (BHSI) has withdrawn from the Hong Kong employees’ compensation (EC) terrorism pool for policies starting or renewing on or after Dec. 1, 2018.
Instead, the company will now offer EC terrorism coverage to its customers directly, becoming the first insurer in Hong Kong to do so. BHSI said its coverage will no longer be subject to the levy on policy premiums as it will be free from any of the pool’s restrictions.
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. The pool provides a maximum limit of HK$10 billion ($1.28 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 percent levy on policy premiums which is then remitted to the Hong Kong SAR Government.
“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," said Marc Breuil, CEO of BHSI Hong Kong.
“The feedback from the customers and brokers we have discussed our approach with has been incredibly encouraging,” Breuil added. "We are excited to offer this market-changing coverage development to our current and future EC customers.”
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