The Marine and Fire Insurance Association of Japan plans to set up a fund to help its members distribute payments over terrorist-related incidents, Hiroyuki Uemura, chairman of the group, said Wednesday.
At a press conference, Uemura said the association has also asked the Financial Services Agency for permission to tap public funds in case a major terrorist incident makes payment difficult even while using the fund.
"We will put into the envisaged pool (of funds) all terrorism-linked risks that domestic nonlife insurers take up, so that we can boost our ability to negotiate with foreign reinsurance firms," Uemura said.
The Sept. 11 terrorist attacks in the United States "led almost all foreign reinsurance companies to refuse taking risks associated with terrorism," he said.
According to Uemura, who is also president of Mitsui Sumitomo Insurance Co., the envisioned fund will be made up of premiums and other contributions from member nonlife insurers.
The fund is similar to the "Pool Re" system set up in Britain in the 1990s. Similar schemes are being discussed in the United States, where the Sept. 11 attacks killed thousands who worked in the World Trade Center and Pentagon.
Japan has similar funds linked to insurance systems covering earthquakes and nuclear energy.