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Submitted by admin on Wed, 05/10/2017 - 05:29

Notices

Guidance on the effect of the Section 30 order published in the NSW Government Gazette on 2 June 2017 

The Emergency Services Levy Insurance Monitor has published an order under Section 30 of the Emergency Services Levy Insurance Monitor Act 2016 (“the Act”).

The order was published in the NSW Gazette on 2 June 2017, following the NSW Governments announcement of the deferal of the FESL (see: Media release), and is effective Monday 5 June 2017.

The order, under section 30(1) of the Act, requires an insurance company (as defined in the Act) to provide certain information.  The information must be provided by including it in invoices or other statements issued by an insurance company, or persons acting on its behalf, to any person as to the price payable for the issue of regulated contracts of insurance.  The information must be provided to those persons by adopting one of the following two options:

  • Option A applies to insurance companies who do not, or are unable to, provide a renewal premium comparison within the renewal notice issued to policyholders for policies commencing in the 2017-18 financial year.
  • Option B applies to insurance companies who can provide, or will be providing, a renewal premium comparison, consistent with the comparative information in option A, within the renewal notice issued to policyholders for policies commencing in the 2017-18 financial year.

Frequently Asked Questions (“FAQs”) are also provided to assist those companies which are required to comply with the order. 

 

  1. The consequences of the publication of the order apply to all regulated contracts of insurance [cf. paragraphs 12 & 14 below].
     
  2. An insurance company (as defined in the Emergency Services Levy Insurance Monitor Act 2016 (“the Act”)), or persons acting on its behalf, must include the information contained in the order (‘the information'), in all invoices or other statements that it issues to any person, after the publication of the order, as to the price payable for the issue of a regulated contract of insurance (‘invoices or other statements'), other than those invoices or other statements issued in respect of:
         (a)    new business;
         (b)    variations to existing regulated contracts of insurance,
         (c)    whether such invoices or other statements are issued in hardcopy or in electronic form (‘the obligation').
     
  3. The phrase ‘regulated contract of insurance' is defined in the Act. The phrase ‘a person acting on behalf of an insurance company' is also defined in the Act and refers to a person other than an insurance company who issues an invoice or other statement, on behalf of an insurance company, as to the price payable for the issue of a regulated contract of insurance to any retail or wholesale consumer.
     
  4. The Insurance Monitor interprets the phrase ‘price payable for the issue of a regulated contract of insurance', in section 30 of the Act, as a reference to the actual dollar amount of any premium, including any base premium, Emergency Services Levy (‘ESL’), GST or duty, brokerage or commission paid or payable in relation to the issue of a regulated contract of insurance.
     
  5. Insurance companies, and those acting on their behalf, required under section 30 of the Act to provide the information, should do so by including the information, shown in Option A of the order, in invoices or other statements, or by providing the information on a separate page enclosed and delivered with such documents.
     
  6. Where the invoices and other statements issued by insurance companies, and persons acting on their behalf, presently display renewal premium comparisons and continue to do so, insurance companies may choose to display the information shown in Option B of the order in their invoices or statement or by providing the information on a separate page enclosed and delivered with such documents.
     
  7. An insurance company will not be regarded by the Insurance Monitor as having contravened section 30 of the Act solely because it expresses the information in invoices or other statements using different wording to that published in the order provided that the essence of the information is retained.
     
  8. Insurance companies should display the renewal premium comparison shown under Option A in the order on a ‘like for like' basis unless prevented by particular circumstances.  Where necessary an insurance company may include additional notes or material to explain the reasons for any changes affecting premiums provided that such additional notes or material do not contradict the information and are not otherwise misleading.
     
  9. Where a regulated contract of insurance issued by an insurance company, after the publication of the order, relates to multiple insurance products, the information must be provided separately for each insurance product.
     
  10. Where insurance companies, in their invoices or statements, provide the information in either Option A or Option B, at different locations within these documents or, on a separate page enclosed and delivered with such documents, they should include a note or signpost where the details of the price payable for the issue of the regulated contracts of insurance first occurs in their invoices or statements, referring the policyholders to the information.
     
  11. The obligation has effect from 5 June 2017 (the first working day after publication of the order in the Gazette).  However, the Insurance Monitor recognises that insurance companies will require some time to comply with the obligation.
     
  12. The Insurance Monitor expects that insurance companies will comply fully with the obligation in relation to:
         (a)     residential building insurance;
         (b)     residential contents insurance; and
         (c)     any combination including both of the above—(‘relevant regulated contracts of insurance') for all such contracts of insurance commencing in the 2017-18 financial year unless otherwise agreed with the Insurance Monitor.  The Insurance Monitor will allow insurance companies a period of up to 12 weeks to achieve full compliance with the obligation.
     
  13. The Insurance Monitor will undertake compliance checks to ensure that insurance companies are complying with the obligation as it affects relevant regulated contracts of insurance.
     
  14. The Insurance Monitor will not undertake enforcement action regarding compliance with the obligation as it applies to the remaining classes or types of insurance within the definition of ‘regulated contract of insurance' unless further Guidance on the application of the obligation to these types or classes of insurance has been issued.
     
  15. An insurance company, and those acting on its behalf, may choose to include the logo of the Insurance Monitor when publishing or displaying the information.  Those persons wishing to do so may request the grant of a non-exclusive and revocable right to use the logo of the Insurance Monitor to be published or displayed with the information.  However, the Insurance Monitor must agree to and be advised in advance of any proposed use of this logo.
     
  16. An insurance company having concerns about its ability to comply with the obligation within the expected timeframe should outline the nature of its difficulties in writing to the Insurance Monitor promptly.  The Insurance Monitor will respond formally to specific matters raised by insurance companies.
     
  17. The Insurance Monitor will review the utility of retaining the obligation in the order on or before 30 June 2018.

 

pdf  copy of s 30 order: size 47KB

File:Microsoft Word 2013 logo.svg  word copy of s 30 order

 

 

 Please note, if you wish to use Monitors logo in communications, please contact the Insurance Monitor to seek permission.  Email: enquiries@eslinsurancemonitor.nsw.gov.au or call Justin Lucas, Risk & Compliance Manager on 02 9372 7201