NSW Emergency Services Levy Insurance Monitor Allan Fels has called a public inquiry requiring companies to explain how they calculate property premiums and outline their plans for removing the levy.

Insurers including IAG, Allianz Australia, QBE and Suncorp are expected to present at the one-day hearing on May 16.

“I have called the inquiry to help increase transparency over the pricing of premiums,” Professor Fels said. “It’s only reasonable consumers know how their policies are priced and what affects this cost, so they are able to make informed decisions.”

The emergency services levy (ESL) will be removed from NSW property insurance policies from July 1, with the monitor appointed to ensure savings are passed on to consumers.

An inquiry discussion paper notes industry forecasts of premium rises next financial year after a period of relatively flat growth, with possible drivers including less competitive pressure, profitability, cost gains – particularly due to recent natural perils – and low interest rates.

“Many hardworking NSW families are struggling and they are entitled to the full costs associated with the levy’s removal from their insurers,” Professor Fels said. “The removal of the ESL should not be used to restore or increase insurer profit margins.

“The effects on policies due to recent catastrophic weather events will also be investigated.”

The monitor says insurers should drop residential property insurance prices by about 20% due to the levy’s removal, while commercial policy reductions are expected to be about 30%.

Professor Fels last month criticised the industry for wide differences in prices across locations and argued insurers do not make it easy for consumers to make comparisons.

Matters of interest for the inquiry include how insurers have charged the levy, plans for communicating its removal, reasons for past premium changes, reinsurance arrangements and expectations for property insurance pricing and profits next fiscal year.

“The public inquiry is further assurance to NSW consumers that insurance companies are on notice,” Professor Fels said. “We are watching and monitoring a range of different factors to ensure consumers are protected during this transition.”

The inquiry will be at the Parliament House Theatrette in Macquarie Street and will be led by Professor Fels and deputy monitor David Cousins.

Submissions are due by May 9 to publicinquiry@eslinsurancemonitor.nsw.gov.au.