Ransom ban among new anti-terror measures

UK-based insurance companies are to be banned from covering the cost of terrorist ransoms, Home Secretary Theresa May is set to announce.

The government hopes firms and families will be deterred from paying ransoms if the money cannot be claimed back, a news report by BBC states.

Ministers maintain that paying ransoms encourages kidnapping and it says Islamic State militants are taking hostages to fund their operations. It is one of several measures proposed in response to the terror threat.

The UK's terror threat level was raised from "substantial" to "severe" earlier this year in response to conflicts in Iraq and Syria.

The Home Office says current laws criminalise terrorist financing but there has been an element of "uncertainty" about whether insurers were prohibited from paying claims made by companies and families who had met ransom demands.

The Home Office says the Terrorism Act 2000 will now be amended to make it an explicit offence for insurers to reimburse such payments.

It says it hopes the change will also discourage insured companies and individuals from making payments in the belief they would be reimbursed.