Victoria’s Fire Services Levy (FSL) Monitor Allan Fels is investigating how insurers are rating customers for flood and bushfire risk, following complaints of large increases in base premiums outside metropolitan Melbourne.

Professor Fels says information used to assess risk in Country Fire Authority (CFA) areas is not commonly accessible to policyholders and is hard to understand.

“Insurers really need to lift their game here,” he said. “They could be doing much more to provide satisfactory explanations about changes in risk ratings and increases in insurance premiums.”

The monitor’s quarterly report, published today, says he continues to investigate two insurers and eight brokers for overcharging the FSL after its abolition on July 1 last year, including one insurer that he says is not working within the guidelines on over-collection.

A total of about $12.7 million was over-collected, and the monitor has agreed arrangements with 26 insurers to refund $5.4 million.

Another 29 insurers and brokers are expected to have dealt with the remaining over-collection by June 30.

The report says two brokers were visited in February to collect information and there is evidence of FSL still being charged that month.

Although the monitor has been concerned about brokers increasing fees and commissions when the FSL was abolished, “investigation of this issue has not revealed sufficient evidence to warrant further action”.

The report says premiums have fallen 3-12% in the Metropolitan Fire Brigade region since the FSL was removed, while CFA regions have seen increases of around 10%.