Victoria’s fire services levy (FSL) is a step nearer abolition after legislation passed the State Parliament’s Legislative Council last week.

State Treasurer Kim Wells says households and businesses “will save more than $100 million a year, with a $20 million concession scheme for pensioners”.

“The unfair tax-on-tax, which slugged people for GST and stamp duty on the fire services levy component of their bill, will also be abolished,” he said.

The legislation allows the Essential Services Commission to review movement in premiums from July 1 this year to June 30 2014.

Mr Wells says legislation will soon be introduced to establish new consumer protection powers, allowing the FSL monitor to impose penalties on insurance companies that engage in false, misleading or deceptive conduct or try to exploit customers during the transition period.

The Lloyd’s Market Association (LMA) has reminded members that insurers must determine the appropriate FSL rate to charge.

It says this follows the Insurance Council of Australia’s decision to stop publishing advisory rates for the scheme.

“Insurers should adopt appropriate actuarial methods to determine their FSL rate, either using their own internal resources or utilising external companies where this is deemed appropriate to ensure the correct amount of FSL is collected,” the LMA said.