QBE has raised its NSW fire service levy (FSL) rates for business written on or after October 11 this year.

The rates on construction risk, fire, industrial special risk and consequential loss policies move to 31.5% from 28%, while the rate for householders’ and house owners’ cover rises to 17.5% from 15.5%.

Motor is up to 1% from 0.5% and valuables moves to 3.5% from 3%.

A QBE Australia spokesman told insuranceNEWS.com.au the increases follow a quarterly review to ensure rates are appropriate for market conditions.

“Because fire services in NSW are funded largely through insurance contributions, in the event the market grows or contracts there will be a flow-on effect to the FSL rates required to be charged.

“While we appreciate these changes will affect premiums, they have been made to ensure QBE meets its statutory FSL obligations.”

NSW is the only mainland state that still has an FSL on insurance, after Victoria last year replaced its levy with a charge on property owners.

The Insurance Council of Australia says it is discussing reform of the levy with the NSW Government.

LMI Group MD Allan Manning, a leading critic of insurance taxes, says it is “extremely disappointing” that the NSW Government has yet to fulfil its promise to remove “this archaic tax from insurance”.

He says The tax leads home and business owners to have inadequate insurance.

“This does not help the home or business owner, business employees, the community or the NSW economy when a loss occurs,” Professor Manning says on his personal blog.