The National Insurance Brokers Association (NIBA) has urged Australian Small Business and Family Enterprise Ombudsman Kate Carnell to take into account the impact tax reform could have on premium affordability for SMEs.

The ombudsman launched an inquiry in late July to look at insurance availability and affordability, the role of brokers in getting the right cover, unfair contract terms, dispute resolution and the effectiveness of relevant codes of conduct and legislation.

Ms Carnell says the inquiry has received more than 800 survey responses and 20 submissions. More detailed consultation will now take place prior to the release of a final report in December.

NIBA’s submission points out that the cost of insurance is influenced by state and territory stamp duty on policies and, in NSW and Tasmania, the Emergency Services Levy (ESL).

“While there are difficulties and challenges in the insurance markets at the present time because of extensive claims costs in recent years, one way of providing significant relief to small business owners, especially in NSW and Tasmania, is the reform of the fire and emergency services levies,” the submission says.

“We also submit that the rest of Australia can and should follow the lead of the ACT and remove stamp duty on insurance premiums, and move to more fair and efficient revenue mechanisms.”

NIBA says the ESL is “extremely unfair and inequitable”, and that “numerous independent inquiries” have recommended its removal from insurance policies.

“All property owners in NSW receive the benefit of the fire and emergency services, but only those who take out property insurance policies contribute to the cost of those services,” it says.

The submission also clarifies the role of brokers in arranging SME insurance cover.

Brokers “act for and on behalf of the client” to help the client understand their risks and get the best coverage at the best price, NIBA says.

“Acting in this way, the insurance broker acts as a purchaser of insurance cover on behalf of their client, not a seller of insurance cover.”

The Insurance Council of Australia (ICA) says it has also provided a submission to the inquiry but declined to release it publicly at this stage.

“The ICA and members will continue to assist the Ombudsman with the inquiry,” Head of Communications & Media Relations Campbell Fuller told insuranceNEWS.com.au.

“The inquiry provides an opportunity to explain how general insurers support this important sector of the Australian economy.”