Victorian Fire Services Levy (FSL) Monitor Allan Fels says he is stepping up an investigation into insurance intermediaries.

The three months to June 30 saw “substantial investigation” into eight brokers, agents or authorised representatives that continued to charge the levy on policies or renewals after July 1 last year, the monitor’s latest quarterly report says.

Some policyholders were still being charged FSL as late as this May, almost a year after the charge was abolished.

“The monitor now considers that there has been a clear contravention of the [Fire Services Levy Monitor Act 2012],” the report says. “While the number of policies and the amounts of FSL involved are relatively small… this conduct warrants a thorough enforcement response.”

The investigation has been lengthy due to the complexity of broker relationships, but the matter may be finalised this quarter.

The report says insurers have generally been co-operative, with 55 out of 56 companies participating in a process to resolve over-collection of $12.3 million.

A formal investigation is under way in relation to CGU, the one company that has not yet participated. It had the second-largest over-collection amount, nearly $1.5 million.

At June 30, 53 insurers had agreed to refund about $10.6 million. Arrangements for two companies with over-collections of $277,000 will be finalised in this quarter.

Meanwhile, refunds of $11.3 million to RACV Insurance policyholders have been completed.

Insurance Manufacturers of Australia, the underwriter jointly owned by RACV and IAG, repaid the money to almost 206,000 customers hit by an 11% price rise less than a week before the FSL abolition.

The monitor considered this was price exploitation in breach of the Act.