New Zealand’s High Court has supported brokers and Vero in their case against the New Zealand Fire Service (NZFS) over composite and split-tier insurance policies.

Justice Paul Heath in December rejected claims composite policies are “artificial in nature”, saying they have commercial benefits to insureds that go beyond reducing the fire levy payment.

The Insurance Brokers Association of New Zealand (IBANZ) and Vero took the NZFS to court seeking declarations over calculation of the levy.

Vero, as lead insurer for the New Zealand Ports Collective Policy, calculated the levy on an aggregate $NZ250 million ($199 million) indemnity, but the NZFS argued a separate levy was payable by the eight port companies in the collective.

Justice Heath also agreed with IBANZ and Vero interpretations on split-tier policies, saying the levy is only payable on the indemnity policy and not on the excess of indemnity.