Insurers confirm commitment to ESL changes as countdown begins

Insurers confirm commitment to ESL changes as countdown begins | Insurance Business

Insurers confirm commitment to ESL changes as countdown begins
Whatever your opinion on the replacement of the Emergency Services Levy (ESL), the change is coming – and now it’s less than 50 days away.

To mark the countdown to ESL being removed from insurance premiums in New South Wales, a host of insurers will be reaffirming their commitment to pass on savings to consumers. Of course, as of July 01, the New South Wales Government will fund metropolitan and rural fire brigades, as well as the State Emergency Service, via the property-based fire and emergency services levy – potentially leaving insured households around $47 a year better off.

According to Insurance Council of Australia CEO Rob Whelan, the changes are long overdue.

“In just over six weeks, insurers will stop passing on to policyholders an inefficient tax that, for many years, had added about 20% to home building and contents premiums, and 30% to commercial policies,” he said on Friday.

“No longer will the cost of properly funding the emergency services fall only on those who buy insurance. All households and businesses rely on these life-saving services, and it is only fair that the entire community contributes to their resourcing.

“The CEOs of more than 100 insurers recently signed a declaration pledging to fully remove the ESL from policies from July 1. When insurers give evidence to the ESL Insurance Monitor, Professor Allan Fels, at next Tuesday’s Public Inquiry in Sydney, they will willingly make the same promise.”

According to Whelan, insurers believe the move is in the best interest of customers.

“Prof. Fels oversaw Victoria’s switch from the Fire Services Levy on insurance to a property-based tax to fund its emergency services in 2013. In his final report to the Victorian Government, Prof. Fels stated he was confident ‘that savings attributable to the elimination of FSL have been passed onto consumers’,” he noted.

“NSW policyholders will also receive all savings attributable to the removal of the ESL.”

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