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| IAG joins in campaign against fire levy on policies | |||
| Insurance Australia Group, the country's biggest motor and home insurer in the domestic market, says that it has been forced to add A$235 million (US$212 million) to the cost of its policies because of the "inequitable" fire service levy imposed by some state governments on insurance policies, reports The Australian newspaper. The general insurer's Chief Executive, Mr Michael Wilkins, is calling for a fairer system under which instead of "slugging" only people who take out home and contents, and business, insurance, all property owners would share the responsibility for funding fire services. Insurance companies in New South Wales, Victoria and Tasmania have to contribute to the funding of fire brigades at the beginning of each financial year. Mr Wilkins says that after the Victorian bushfires last year, the cost of this funding for insurers has risen significantly, forcing premium rates to rise. Another insurer, Suncorp, says that the fire service levy accounts for 20% of the cost of its metro home insurance policies in New South Wales and Victoria. For rural properties in Victoria, it can be as high as 31% of the base premium. The A$24 billion general insurance industry has been campaigning to abolish the controversial tax, claiming it contributes to Australia's high level of under-insurance due to the impact on premiums. The Insurance Council of Australia, which represents general insurers, says that determining how much to add to premiums to account for the contribution is difficult and often leads to under- or over-collection by insurance companies. The amount insurers contribute to fire services is based on their market share of the total "deemed" premium pool for the year ahead. |
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| Ins Communications Pte Ltd · 69 Amoy Street, Singapore 069 888 Tel: (65) 6224 5583 · Fax: (65) 6224 1091 http://www.meinsurancereview.com/pages/e-weekly.asp?country=4 Published: 9/11/2010 5:02:04 AM © 2010 All rights reserved |
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