On 30 May 2017 the NSW Government announced that it would be deferring the removal of emergency services funding from insurance policies.
Under the deferral, emergency services funding (the Emergency Services Levy, ESL) will continue to be collected through property insurance policies and not be collected alongside council rates from 1 July 2017.
Insurers collectively reduced the amount of ESL charged in the lead-up to its planned (now deferred) removal from insurance policies from 1 July 2017. A two year transition period has been established from 1 July 2017 (2017-2018 and 2018-2019) when insurers will move to re-instate the ESL on insurance policies.
The NSW Government confirmed that the Insurance Monitor will oversee a smooth transition from the former scheme to the new funding model, and ensure insurance companies collect only the amounts necessary to meet fire and emergency services funding requirements.
The Insurance Monitor’s tenure has been extended from December 2018 to 30 June 2020.
Insurance price monitoring has been in place for some time, policyholders will not have to pay more than is necessary to recover the ESL, plus the associated GST and Duty during the transition period.
Penalties up to $10 million apply to insurers who do the wrong thing by charging unreasonably high prices or mislead policyholders.
For more information see the Emergency Services Levy Insurance Monitor Act 2016.