Victorian Fire Services Levy (FSL) Monitor Allan Fels and CGU remain in talks over the insurer’s levy over-collection.

It comes after Professor Fels last week singled out the insurer for criticism, saying the industry has largely resolved over-collection and “the sole company that has not yet participated in the resolution process is CGU”.

He warned that unless the matter progresses, a formal investigation into CGU will continue that could end in court action.

On Friday the monitor and CGU released a statement saying they “have held productive discussions, which are ongoing. Both parties are confident they can reach a mutually satisfactory outcome.”

Insurers over-collected the FSL in its final year – fiscal 2012/13 – because they had to estimate the amount they were required to collect. The right amount was not known until October.

Professor Fels told insurers they must refund the money, but agreed very small amounts could be sent to nominated consumer groups.

CGU decided to send its entire $1.5 million over-collection, the second-largest amount, to the Country Fire Authority (CFA).

A spokesman told insuranceNEWS.com.au the insurer was an “early mover” on over-collection and paid the money in early March.

“The CFA does a remarkable job in protecting our local communities and our customers would see it as appropriate to direct fire services levy funds to the fire services.

“CGU’s over-collection was less than $10 per customer.”

Professor Fels says about 55 companies have agreed to refund $10.8 million to customers, part of $23.4 million returned to 39,000 consumers.

The median over-collection among insurers that refunded customers was $143,496.

The insurer with the largest over-collection, about $1.6 million, has refunded 90% of the money to customers.