On 13 January 2010, the European Commission (Commission) approved Denmark’s proposal to guarantee non-life insurance policies that cover damages resulting from terrorism. As the current global market for reinsuring against such risks is weak, Danish insurance providers lack adequate access to private reinsurance to cover against terrorist attacks. Consequently, the Government is to introduce a state guarantee that will safeguard them, believing that access to this type of cover is an important public priority. In return for paying a variable fee and accepting liability for terrorist-inflicted damages up to a set amount, the Government will guarantee up to DKK 15 billion in losses that exceed the threshold. The Commission has approved the scheme under Article 107(3)(c) TFEU (formerly Article 87(3)(c) EC), which permits the approval of aid to assist the development of certain economic activities. The measure is ultimately intended to be self-funding and will be reviewed on a yearly basis to ensure that it does not operate to the detriment of private market operators.
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European Commission endorses Denmark’s backing of terror insurance providers
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