Frantic behind-the-scenes negotiations are continuing in Sydney as NSW general insurers try to find a solution to the impasse with the State Government over its $69 million levy on the industry.

ICA is leading a push to develop a “special purpose vehicle” to bypass the state’s controversial Insurance Protection Tax, a levy intended to force the industry to “do its bit” for the state’s $600 million HIH rescue plan. ICA spokesperson Sandy Watson agreed negotiations are under way to formulate a solution. “But we don’t have any details to release publicly at this stage.”

She said it is “too early to tell” when details will be made public. It won’t be long, however. The insurers are scheduled to make their first payments to the NSW Government by September 15.

But NSW Treasurer Michael Egan who enraged the industry when he introduced his $69 million levy with a “no pass-on” provision, has agreed to delay a collection of the first installment while the industry puts its plan together.

Mr Egan said any alternative scheme would need to satisfy all the Government’s objectives. That could be a tough one, because someone has to pay eventually. And Mr Egan said if the insurers’ alternative fails to meet the Government’s objectives, the tax will be automatically reactivated.