Act on a Terror Insurance Scheme in the Property Insurance Sector

Act on a Terror Insurance Scheme in the Property Insurance Sector

Hereby is promulgated the Act on a Terror Insurance Scheme in the Property Insurance Sector, cf. Act Consolidation No. 459 of 7 May 2025, with the amendment resulting from Section 17 of Act No. 712 of 20 June 2025.

Chapter 1 Scope of Application of the Act

Section 1. Under this Act, compensation may be granted for immediate damages incurred in Denmark caused by terrorist acts involving nuclear, biological, chemical, or radioactive weapons (NBCR terrorism).

Subsection 2. Compensation may be granted for damage to the following, subject to Subsection 4:

1. Buildings, land, and movable property.
2. Railway vehicles.
3. Motor vehicles.
4. Ships.

Subsection 3. Compensation may additionally be granted for loss of business income related to buildings and movable property.

Subsection 4. Compensation in accordance with Subsection 2 may only be granted if insurance has been taken out with a property insurance company covered by Section 5 that covers cases of fire on the property or object.

Subsection 5. The Ministry of Industry and Business shall establish detailed rules regarding the conditions for compensation.

Section 2. Compensation may be granted to the owner, mortgagee, or other holder of another right, or to the person bearing the risk for the object, who suffers loss due to deterioration or destruction. The same applies to an insurance company that pays compensation in accordance with an agreement covering the damages referred to in Section 1.

Chapter 2 Financing and Repayment

Section 3. Payments under the Act and the associated administrative costs are financed through a state re-lending facility. Re-lending may be taken within a total limit of DKK 13.4 billion (2010 level). The re-lending limit is adjusted in accordance with Section 20 of the Tax on Personal Injury Act.

Subsection 2. If the value of the total damages eligible for compensation in connection with an NBCR terrorist attack exceeds the re-lending limit, those eligible for compensation shall only have a claim to a proportional payment.

Subsection 3. Drawdowns on the state re-lending facility must be repaid with interest corresponding to the official discount rate set from time to time. Interest is credited at the end of each calendar year. The re-lending is repaid through subsequent collections of an annual fee levied on insurance policies covered by the scheme.

Subsection 4. The fee is collected by the property insurance companies and constitutes a supplement to the insurance premium of 5% per policy on insurance against fire taken out for properties and objects covered by Section 1. The fee is collected together with the first premium in the calendar year following the payment. If the fee payments in a year exceed the repayment requirement outstanding after drawdowns on the state re-lending facility, the amount shall be refunded proportionally to the insured parties covered.

Subsection 5. If an insured party switches property insurance companies, and can prove to the new company that the fee for the year has been paid to the previous company for an object covered by Section 1, the new company shall not collect the fee in accordance with Subsection 4.

Subsection 6. The Ministry of Industry and Business may decide to temporarily reduce the rate in Subsection 4 if special circumstances so dictate.

Section 4. The costs of the administration of the scheme, including payment for external assistance and the property insurance companies' performance of tasks, are covered within the limit set in Section 3.

Chapter 3 Obligations of Insurance Companies

Section 5. The following insurance companies are obliged to perform tasks covered by Section 3, Subsections 4 and 5, and Sections 6-11:

1. Direct-writing property insurance companies that have received permission from the Danish Financial Supervisory Authority to conduct insurance business and that write insurance for the objects mentioned in Section 1.
2. Branches located in Denmark of direct-writing property insurance companies with headquarters in another country within the European Union or a country with which the Union has concluded an agreement in the financial sector, which are notified to write insurance in Denmark for the objects mentioned in Section 1.
3. Direct-writing property insurance companies with headquarters in another country within the European Union or a country with which the Union has concluded an agreement in the financial sector, which are notified to write insurance in Denmark via cross-border service provision for the objects mentioned in Section 1.

Section 6. The property insurance company shall assess the reported damage caused by NBCR terrorism. The assessor's report shall be sent to the insured party no later than 30 working days after the assessor has the necessary basis to perform the assessment. The insured party may submit comments to the property insurance company within 14 days after receiving the assessor's report.

Subsection 2. The property insurance company must make a decision no later than 30 working days after all necessary information for the preparation of the final assessor's report is available.

Subsection 3. The Terror Insurance Council may, in special cases, exempt from the deadlines in Subsections 1 and 2.

Subsection 4. The Ministry of Industry and Business may establish detailed rules for the case processing by property insurance companies, including the use of common IT systems, etc.

Section 7. A property insurance company offering to write coverage in accordance with Section 1 may, by agreement, perform another property insurance company's tasks under this Act. Agreements on task performance on behalf of other property insurance companies must be approved by the Terror Insurance Council before the property insurance company begins task performance in accordance with the agreement.

Section 8. The property insurance company refers compensation for payment via the Terror Insurance Council.

Subsection 2. The principles in Sections 39, 57, and 58 of the Act on Insurance Contracts apply mutatis mutandis to the decisions of property insurance companies in cases of NBCR terrorism.

Section 9. The property insurance companies must, after each quarter and no later than the 15th of the following month, report the amount of due fees distributed among the insurance categories mentioned in Section 1, Subsection 2, to the Terror Insurance Council. The report must be signed by the company's responsible management.

Subsection 2. The due fee amount per quarter includes the fees that fall due for payment in the relevant quarter. Fees written off as irrecoverable are deducted from the fee amount in the quarter in which the write-off of premium income including fees takes place.

Section 10. A property insurance company's due fee amount for a quarter must be paid to the Terror Insurance Council by the end of the following month.

Subsection 2. If a property insurance company does not pay the fee amount on time, the property insurance company must pay 1.3% monthly interest for each started month from the last due payment day, but at least DKK 20.

Section 11. The Administration Act and the Act on Public Access to Files in the Public Administration apply to the property insurance companies' handling of claims under this Act.

Chapter 4 The Terror Insurance Council

Section 12. The Ministry of Industry and Business appoints the Terror Insurance Council consisting of 1 chairman and 3 members, as well as substitutes for these.

Subsection 2. The Council is composed of:

1. 1 chairman and 1 substitute from the Ministry of Industry and Business.
2. 1 member and 1 substitute from the Ministry of Finance.
3. 1 member and 1 substitute from the Danish Financial Supervisory Authority.
4. 1 member and 1 substitute upon nomination from the insurance sector.

Subsection 3. The chairman and members, as well as their substitutes, are appointed for a 4-year period and may be reappointed. If a member leaves office before the end of the period, a new member is appointed for a period shorter than 4 years.

Subsection 4. The Terror Insurance Council may use external assistance as needed.

Subsection 5. The Ministry of Industry and Business shall establish detailed rules for the work of the Terror Insurance Council.

Subsection 6. The Ministry of Industry and Business shall establish detailed rules regarding the secretariat function for the Terror Insurance Council, including payment for the secretariat's work and for external assistance.

Section 13. The Terror Insurance Council accounts for years where payments have been made from the scheme, or where property insurance companies have collected contributions to the scheme.

Subsection 2. The accounts are audited by a state-authorised public accountant and submitted to the Ministry of Industry and Business.

Subsection 3. The Ministry of Industry and Business has access to the Terror Insurance Council's accounting material, including audit protocols, etc.

Chapter 5 Competences of the Terror Insurance Council

Section 14. The Government must, after a report from the Terror Insurance Council, decide whether an NBCR terrorist act has occurred that will activate the terror insurance scheme.

Section 15. The Terror Insurance Council may decide to pay compensation or make advance payments if the Terror Insurance Council assesses that the sum of compensation to be paid in connection with an NBCR terrorist act can be accommodated within the remaining possible drawdown on the state re-lending facility, even if the Terror Insurance Council has not received final calculations from all eligible parties.

Subsection 2. The Terror Insurance Council may decide to make advance payments of the proportional compensation, cf. Section 3, Subsection 2, if the Terror Insurance Council assesses that the sum of compensation to be paid in connection with an NBCR terrorist attack cannot be accommodated within the remaining possible drawdown on the re-lending facility, even if the Terror Insurance Council has not received final calculations from all eligible parties.

Subsection 3. The Terror Insurance Council shall contact the Ministry of Industry and Business if the Terror Insurance Council assesses that there is a probability that the sum of compensation to be paid under this Act will exceed the maximum of the re-lending facility.

Section 16. The Terror Insurance Council, after negotiations with the insurance sector, establishes rules regarding the Terror Insurance Council's payment for the property insurance companies' handling and assessment of NBCR terrorism damages.

Section 17. The Terror Insurance Council supervises the property insurance companies' handling of NBCR terrorism damages. The Terror Insurance Council may demand that the property insurance companies covered by the Act provide all information deemed necessary to ensure that the Act's rules and rules issued pursuant to the Act are complied with.

Subsection 2. The Terror Insurance Council may issue the orders deemed necessary for the property insurance companies' compliance with the Act or rules established pursuant to the Act. The Terror Insurance Council may publish orders under the first sentence.

Subsection 3. The Terror Insurance Council may, in special cases, require a property insurance company to repay improperly paid compensation.

Subsection 4. Sections 285-290 of the Act on Insurance Business apply mutatis mutandis to the Terror Insurance Council's supervision under this Act.

Subsection 5. The Ministry of Industry and Business may establish detailed rules for the supervision, including for the Terror Insurance Council's use of orders to the property insurance companies and their publication, as well as for repayment demands against property insurance companies regarding improperly paid compensation.

Chapter 6 Notification, Right of Appeal, and Penal Provisions

Section 18. The injured party must report the damage to the property insurance company where the injured party has insured the damaged object no later than 6 months after the damage occurred.

Subsection 2. The Terror Insurance Council may, in special cases, exempt from the 6-month deadline.

Section 19. Decisions by property insurance companies regarding NBCR terrorism damages may be brought before the Terror Insurance Council no later than 3 months after the decision was communicated to the relevant party.

Subsection 2. Decisions by the Terror Insurance Council may not be brought before another administrative authority.

Section 20. Only the covered property insurance companies are considered parties in relation to the Terror Insurance Council's decisions.

Subsection 2. However, the person appealing under Section 19, Subsection 1, is considered a party insofar as it concerns the question of the insurance company's case processing in the relevant appeal case.

Section 21. Unless a higher penalty is incurred under other legislation, the following shall be punishable by a fine:

1. Anyone who intentionally or through gross negligence violates Section 3, Subsection 4, or Section 9, Subsection 1, or
2. Anyone who intentionally provides false or misleading information or conceals information of significance for the decision on compensation.

Subsection 2. Companies, etc. (legal persons) may be subject to criminal liability according to the rules in Chapter 5 of the Criminal Code.

Subsection 3. In rules issued pursuant to the Act, a fine may be established for violation of provisions in the rules.

Subsection 4. The limitation period for violations of the Act's provisions or rules issued pursuant to the Act is 5 years.

Chapter 7 Entry into Force and Other Provisions

Section 22. The Act enters into force on 1 July 2019.

Subsection 2. Act No. 469 of 17 June 2008 on a Terror Insurance Scheme in the Property Insurance Sector is repealed.

Subsection 3. Regulations issued pursuant to Act No. 469 of 17 June 2008 on a Terror Insurance Scheme in the Property Insurance Sector remain in force until they are replaced by regulations issued pursuant to this Act or repealed.

Section 23. The Act does not apply to the Faroe Islands and Greenland, but may be put into force, wholly or partially, for Greenland by Royal Order with the changes that Greenlandic conditions dictate.

Act No. 718 of 13 June 2023 (Act on Insurance Business) contains the following entry into force provision: Section 321. The Act enters into force on 1 January 2024. Section 322. (Omitted)

Act No. 712 of 20 June 2025 (Handling of crypto exposures, preparation of ESG transition plans, new documentation requirements for institutions' management structure, allocation of responsibility and reporting lines, clearer rules for permission to credit institutions from countries outside the EU/EEA (third countries), new supervisory power for the Danish Financial Supervisory Authority regarding approval of significant acquisitions of shareholdings in other companies, criminalisation of the disclosure regulation, modernisation of the rules in the FAIF-UCITS II Directive, strengthening of rules on combating national and international money laundering, and establishment of a common European access point (ESAP) for submission of a number of published information, etc.)1) contains the following entry into force provision: Section 22 Subsection 1. The Act enters into force on 1 July 2025, subject to Subsections 2-13. Subsections 2-13. (Omitted)

Danish Financial Supervisory Authority, 18 November 2025 Louise Mogensen / Karina Vilhof Ankergren

1. The legislative amendment concerns Section 14.