The National Insurance Brokers Association (NIBA) is backing the Insurance Council of Australia (ICA) campaign urging the next NSW government to ditch the “unfair” Emergency Services Levy (ESL).

ICA has published a list of demands in the run-up to the NSW election on March 25, and ditching the ESL is top of the list. NSW is the last mainland state to fund emergency services through a levy on insurance premiums.

“The model is inequitable because the only people funding it are the people taking out insurance policies,” NIBA CEO Phil Kewin told insuranceNEWS.com.au.

“With cost-of-living pressures rising, that pool may decrease as people become underinsured or uninsured.

“We are not recommending the best alternative – different states have different models. But we say it needs to be reviewed.

“We are not taking sides politically but whoever is in government needs to take a look at it.

“The abolition of the ESL would ease the pressure on NSW insurance customers and enable them to have access to more affordable insurance.”

NIBA’s main concern is for broker clients, but it also says the levy can be highly complex for brokers. If brokers source cover from overseas, the broker can become responsible for calculating and collecting the levy.

The calculation is notoriously difficult, and brokers can be left out of pocket if they don’t collect enough.

The ICA’s report says the ESL adds about 18% to home insurance premiums and up to 40% to business cover. NSW insurance customers pay nearly three times the amount of state taxes than Victorian insurance customers.