The Queensland Government has bowed to Federal Government pressure and begun seeking reinsurance quotes, but Queensland Finance Minister Rachel Nolan says the price and the policy will have to be right.

She says while the state treasury is seeking quotes “in good faith in order to play a constructive role in this debate”, she “won’t just be writing a blank cheque to the insurance industry”.

Premier Anna Bligh denies the state has been pressured into shopping around for cover by the Federal Government, which is itself under pressure from independent senator Nick Xenophon.

Ms Bligh told ABC News her government will “see what the market says”.

“Unless it is a significantly better deal than we were offered in 2004, we'll stick with our own arrangements.”

The move brings the Federal Government one step closer to passing its proposed $1.8 billion flood levy. Senator Xenophon’s support is needed to pass the bill in the Senate, but he has tied his support to a guarantee the Federal Government will penalise states that don’t insure their natural catastrophe exposures.