Fresh from the New South Wales Government decision to defer the new fire and emergency services levy (ESL), insurance monitor Allan Fels has sought another public pledge from insurers to commit to adopting new guidelines.
The insurance monitor issued new guidelines on prohibition against price exploitation and engaging in false or misleading conduct following the deferral and Fels has requested each insurance company CEO to pledge their support.
Fels received similar backing from executives at every major insurance firm in New South Wales in May, for the deferred changes, and said that the industry should pledge “to do the right thing and comply with the guidelines”.
Fels said insurers will have to provide clear written communications with their policyholders about the continuation of the levy on property insurance policies and, for the first time, will have to specify how much ESL they will charge on renewal notices both physically and online.
“Monitoring of the industry is occurring to ensure that insurers do not over-collect the amount of ESL required of them from their policyholders,” Fels said.
“We have already communicated with the largest insurers in NSW to outline our expectations of the ESL’s continuation. Our new guidelines further enforce this.
A two-year transition period has been established, to 2019, and Fels said that he expects each insurer to be able to “justify the approach they adopt in continuing the levy”.
“We have extensive powers to collect data and question insurers,” Fels continued.
Penalties of up to $10m can apply to insurers who are found in breach of the new guidelines as Fels noted that any unreasonable price increases will face scrutiny.
The insurance monitor’s price monitoring powers have been extended from December 2018 to June 30 2020.
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