The Treasury has called for submissions on a user-pays funding model for the Australian Securities and Investments Commission’s (ASIC) regulatory work.

Annual levies and fees for service will be collected from insurers and other financial services providers, according to the Treasury’s proposal.

The funding model will be introduced in the second half of next year.

ASIC proposes a variable levy for general insurance product issuers, based on net premium revenue written in the previous financial year plus a minimum fee of $20,000.

Insurance product distributors will pay a flat annual levy of $2400 and risk management product providers a fixed rate of $4500.

ASIC says regulating the insurance sector will cost about $5.5 million based on 2016/17 forecasts, including about $4.1 million recovered via levies from insurance product providers.

The sector takes up 2% of the organisation’s budget for regulatory activities.

ASIC will issue invoices to recover its 2017/18 costs in January 2019.

“We think this is a much better model than last year’s [proposal], but we do need clarity on some areas of details before we can respond to the Government,” National Insurance Brokers Association CEO Dallas Booth told insuranceNEWS.com.au.

“It’s not yet clear to me exactly how the model will work for brokers, and we need to clarify that.

“The recent report provides much better information on those matters and it also shows the model proposes to collect most of the levy from areas where ASIC does most of its work.”

The closing date for submissions is December 16. Click here for more details.