The National Insurance Brokers Association (NIBA) has welcomed a Tasmanian government consultation on fire and emergency services reforms that may end a levy on business insurance premiums.

“The review of the fire service has pointed out the current funding arrangements are not sustainable, and we believe they place an unfair burden on policyholders,” NIBA CEO Dallas Booth told insuranceNEWS.com.au.

“NIBA will work with members in Tasmania to support the reform of the levy to one that meets the ongoing needs of the fire services, while at the same time is far more equitable for all concerned.”

The amount added to premiums by the levy, which applies to certain classes of business insurance, ranges from 2-28%, according to the Blake Fire Service Act Review.

The levy raised $21.39 million in the 2019 financial year, providing 25% of Tasmania Fire Service funds, but the review says the collectible amount is not predictable and it doesn’t satisfy sustainability, stability, simplicity or equitable tests.

Dropping the levy would see Tasmania follow the trend in other states, with NSW currently the last mainland state still taxing insurers to fund fire and emergency services.

The report recommends replacing the insurance levy with a property-based alternative or another funding source, with transition arrangements to remain until a new system is in place.

Recommendations also include engaging with the Insurance Council of Australia and property owners to quantify benefits from lower insurance premiums and consider how these might be shared with the broader community.

The Blake review makes 45 recommendations, including that the Tasmania Fire Service and the SES be integrated into a new Tasmania Fire and Emergency Services organisation.

The Tasmanian Government has called for submissions on the recommendations by November 15.

Michael Stevens, a policy professional who was Bushfire Recovery Coordinator for the 2013 and 2019 bushfires, will lead the next stage of the reform work, while the Department of Treasury and Finance will release an options paper on potential funding models.

More details are available here.