The Insurance Council of Australia (ICA) has told Treasury’s review of the financial institutions supervisory levies proposed for 2016/17 that regulators must improve information flows to the insurance industry.

It says this will allow the industry to better judge whether it is getting “value for money” from regulators.

“Given industry’s strong support for well-targeted regulatory activities that reduce systemic and consumer risks, we consider there is a need for greater transparency and improved industry understanding of regulatory priorities,” CEO Rob Whelan says in the submission.

ICA argues that the Federal Government’s decision to move to an industry funding model for the Australian Securities and Investments Commission (ASIC) makes it “even more imperative to have in place an adequate framework around transparency and regulator responsibility to ensure the appropriate use of industry funding”.

Total levies apportioned to the general insurance sector for 2016/17 come to $33.4 million, of which $20.2 million is allocated for the Australian Prudential Regulation Authority (APRA) – a 30% increase from the current fiscal year.

ICA has expressed concern that consultation on the levies has been sought prior to the release of APRA’s cost recovery implementation statement, which will not be issued until after June 30.

“We are also concerned that there remains a lack of detail, beyond internal estimates of resource utilisation by each industry, on the way in which resources will be allocated,” ICA says. “For example, it is unclear how the $13.2 million ASIC levy for general insurance will be allocated.

“In order to comment meaningfully on the appropriate level of levy funding, industry requires adequate dialogue with regulators on how they see the current regulatory landscape and their proposed priorities for 2016/17.

“It remains unclear how the cost impact to insurers can be assessed in isolation from regulators consulting with industry and in the absence of an activity specific breakdown of total funding costs.”

ICA says it would appreciate the Government “encouraging” regulators to release their cost recover implementation reports concurrently with the annual levies consultation process, “rather than at its conclusion”.