Insurance companies warned about fire services levy
ABCJanuary 30, 2013, 10:33 am
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Insurance companies are being warned they face fines of up to $10 million if they continue to charge customers for Victoria’s fire services levy (FSL).
The levy, which pays for fire services, has been paid by home owners as part of their insurance premiums.
But from July it will be collected by councils through their rates.
Victoria’s Fire Services Levy monitor, Allan Fels, is writing to all insurers requesting information about the way they intend to remove the charge from their premiums.
“We’re going to call on them to explain to all consumers and businesses exactly what they’re doing about the levy,” he told.
“They have to be honest about that because there’s a $10 million fine for misleading the public on that point.”
Fels is concerned that the FSL will be taken off the premiums as a line item, but will sneak into the lump sum of insurance.
Previously only people who bought insurance paid the fire levy and under the new system where everybody pays, the price of insurance is expected to fall.
Meanwhile, the Victorian Government has set aside $53 million to help smooth the transition to the system for charging the fire services levy based on local council rates.
The money will help the local councils implement, administer and collect the new levy and pay for costs associated with the running of Mr Fels’ office.
State Treasurer Kim Wells says the new property-based levy is the biggest state-based tax reform in decades.