The Insurance Council of Australia (ICA) is again agitating for NSW insurance taxes to be spiked, continuing a long-running sparring match with state governments over insurance affordability.

Three years after a Department of Treasury and Finance report recommended NSW retain the fire services levy, ICA has lodged a submission with the Independent Pricing & Regulatory Tribunal (IPART) for the state’s insurance taxes to be dumped.

ICA CEO Kerrie Kelly says the high cost of insurance is a disincentive for consumers. She also invokes changing weather patterns brought by climate change as a reason for insurance tax reform.

“Concern over climate change and the need to respond to more erratic weather events requires a sound policy framework that encourages adaptive behaviours,” she said.

“Measures that remove distortions and encourage general insurance uptake are fundamental to achieving this.”

IPART was originally created in 1992 to regulate the prices charged by government utilities that acted as monopolies, but its role has been expanded to oversee the regulation of the water, gas, electricity and public transport industries.

NSW, alongside Victoria and Tasmania, has the highest rates of taxation on insurance premiums in Australia, collecting $1.2 billion in annual revenue or about 7% of all state taxes.

ICA says the pooled impact of insurance taxes increases premiums by 40% for personal and 60% for commercial lines.

Respected economist Geoff Carmody told an ICA seminar in Melbourne last month the tax burden on premiums is “stupid, inefficient and archaic”.