QBE has blamed a programming error in two of its computer systems for continuing to charge the Victorian fire services levy (FSL) on premiums after it was dropped on July 1.

The FSL Monitor picked up the error after investigating consumer complaints and checking online quotes. It also used its powers to obtain data confirming pricing anomalies.

QBE has avoided a fine of up to $10 million after monitor Allan Fels accepted the charges were inadvertent. It has refunded $1.1 million to 11,495 policyholders, about 6% of its Victorian policyholder base.

The insurer has also given the monitor an enforceable undertaking to provide, within a month, an independent audit confirming it has identified and remediated all system errors, identified and refunded all affected policies and put in place “safeguards and audit systems to ensure similar errors do not reoccur”.

QBE Australia CEO Colin Fagen says the company has worked closely with the monitor throughout the process.