The abolition of the $800 million NSW emergency services levy (ESL) next July should lead to reduced property insurance premiums – and insurers who put up prices to boost margins will be heavily penalised, according to guidelines issued to the industry.

ESL Insurance Monitor Allan Fels says the guidelines set out penalties of up to $10 million for corporations and $500,000 for individuals engaging in price exploitation or false and misleading conduct.

“I want insurers to understand we are already closely watching to ensure they do not take early advantage of the opportunity to put up premiums as a result of the levy’s removal next year,” Professor Fels said.

“The NSW Government has provided me with extensive powers to ensure consumers are protected in the transition, under a price oversight regime that is in place ahead of the abolition of the levy.”

Professor Fels says he can act against unreasonably high prices dating back to December 10 last year, when the Government announced his appointment.

“This is some months ahead of the legislation to bring in the property-based levy, and a significant departure from how the [similar] reform was done in Victoria.”

He says this early action means the potential for premium increases in anticipation of the levy’s removal is “kept in check”.

The ESL will be replaced with the Emergency Services Property Levy – a charge on property rather than insurance. The guidelines can be found here.

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