Guidance on the effect of the section 30 order published by the Insurance Monitor in the NSW Government Gazette on 11 August 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 Government Gazette on 2 June 2017. Following the commencement of the Emergency Services Levy Act 2017, which deferred the introduction of the property based fire and emergency services levy and re-established insurer contributions to the NSW emergency services organisations.
The effect of the order is suspended until 1 July 2019.
The order, under section 30 (1) of the Act, requires an insurance company (as defined in the Act) to provide information. The information must be provided by including it in invoices and 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.
Frequently Asked Questions (“FAQs”) are also provided to assist those companies which are required to comply with the order.
- The consequences of the publication of the order apply to all regulated contracts of insurance [cf. paragraphs 2, 7 & 9 below].
- An insurance company (as defined in 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 1 July 2019, 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').
- The phrase ‘regulated contract of insurance' is defined in the Act. The phrase ‘a person acting on behalf of an insurance company', 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.
- 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.
- 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.
- Insurance companies should display the renewal premium comparison in the order on a ‘like for like' basis unless prevented by particular circumstances. 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.
- Where a regulated contract of insurance issued by an insurance company, after 1 July 2019, relates to multiple insurance products, the information must be provided separately for each insurance product.
- 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 2019-2020 financial year.
- The Insurance Monitor will undertake compliance checks after 1 July 2019 to ensure that insurance companies are complying with the obligation as it affects relevant regulated contracts of insurance.
- 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.
- 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.
Please note, if you wish to use Monitors logo in communications, please contact the Insurance Monitor to seek permission. Email: email@example.com or call Justin Lucas, Risk & Compliance Manager on 02 9372 7201