Controversial plans to change the way the New Zealand fire service levy is calculated have been delayed.

Following a review, the levy on insurance was increased by almost 40% to fund a new amalgamated fire service.

Fire and Emergency New Zealand launched on July 1, bringing together 40 urban and rural fire services.

Complex changes to the way the levy is calculated were proposed for January next year, having already been delayed from an initial date of July this year.

Now a “revocation order” has put the date back further, to July next year.

The new calculation basis attempts to widen the levy net, but has caused confusion because it includes such factors as third-party liability covers and travel insurance.

Insurance Brokers Association of New Zealand CEO Gary Young told insuranceNEWS.com.au he welcomes the latest delay, but says it is “unlikely to be sufficient”.

“Discussions in recent weeks identified considerable work still required to determine how the regime will operate,” he said.

“The complexity of the compliance involved is such that many issues remain unresolved.

“Both brokers and insurers require clarity before implementing necessary system and process changes.

“These changes will be complex and expensive both to implement and operate in the future.”

The Insurance Council of New Zealand also welcomes the delay.

“The postponement reflects the complexity of these changes and underlines one of the many reasons why we have long objected to applying a tax on insurance to fund these public-good services,” CEO Tim Grafton told insuranceNEWS.com.au.

“The need to postpone the levy was raised by the Insurance Council with [Internal Affairs Minister] Tracey Martin earlier this year, so we are pleased she has agreed to this.

“Even so, meeting a July 1 2019 deadline will be immensely challenging given the amount of work that needs to be done to provide insurers with clarity about how the [reform] will be applied.”