ICA welcomes passing of ESL Legislation

ICA welcomes passing of ESL Legislation | Insurance Business

ICA welcomes passing of ESL Legislation
The Insurance Council of Australia (ICA) has welcomed the NSW Parliament’s decision to axe the Emergency Services Levy (ESL) by passing the Fire and Emergency Services Levy Bill 2017.

The new system will see the state’s firefighters and State Emergency Service get its funding from the property-based Fire and Emergency Services Levy (FESL) instead of from tax on insurance companies, as of July 01, 2017.

The ESL is said to add some 21% to home building and contents premiums, as well as impacting some motor insurance policies.

“No longer will the responsibility for funding these vital services be borne only by households that purchase insurance, but by the entire community,” said ICA CEO Rob Whelan. “Everyone benefits from these services, and it is only fair that all homeowners contribute to their upkeep.

“Though the industry is delighted to no longer be acting as a tax collector for the government, the switch has no significant financial impact on insurance companies because the ESL is
ultimately paid for by policyholders, not insurers.”

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The ICA boss said NSW policyholders would benefit once the new system is implemented.

“Though households will now pay the FESL through their council rates, the reduction in insurance premiums through the removal of the ESL will leave policyholders ahead by an average of almost $50 a year, according to government estimates,” he explained.


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