The Victorian Government is poised to begin charging a fire services levy (FSL) from July 1 on notional premiums where the broker or agent uses net ratings.

The State Emergency Service Act requires insurers to report the notional premium for property policies with deductibles of $10,000 or more.

In February this year, the Act’s implementation was delayed to July next year due to the difficulty of devising a premium calculation.

However, Sunrise Exchange News has obtained a copy of a circular sent by the Melbourne Fire Brigade (MFB) and Country Fire Authority to brokers that participate in the Australian Fire Brigade Charges Scheme for placements into the London market.

The circular points out Part 7 of the Act will come into effect from July this year, resulting in changed obligations for insurers and brokers in relation to providing information to the MFB.

The main point is that insurers will have to charge for FSL on net rating. Brokers putting in FSL returns for clients using unauthorised foreign insurers will be required to provide additional information on the client.

Insurance Council of Australia (ICA) Group Manager Southern Division Peter Jamvold says he met insurers and Victorian Government representatives on December 20 last year to discuss the controversial Act.

“The deductibles provision was discussed but the State Government said they hadn’t given any thought yet to the net ratings issue,” he said. “ICA explained to them that there could be some complications because some insurers use net ratings and other don’t.”

Mr Jamvold says he had no warning of the move – which appears to be the normal modus operandi of the Victorian Government when dealing with the insurance industry.