The Insurance Monitor issues revised guidelines for setting premiums
Insurance CEOs asked to publicly commit to new systems and procedures.
The Insurance Monitor has released new guidelines for property insurance companies prohibiting them from engaging in false or misleading conduct and price exploitation.
The move comes in the wake of the NSW government's tabling of the Fire and Emergency Services Levy (FESL).
While the FESL is deferred, the Emergency Services Levy (ESL) will remain in place and will be collected through home insurance premiums.
The ESL was originally meant to be scrapped on 1 July 2017.
Insurance Monitor Professor Allan Fels AO is seeking a public commitment from home insurance company CEOs that they will adopt these new systems.
“The guidelines enforce the requirement for insurers to specify how much ESL they will charge in renewal notices and also for the first time, in online quotations," Fels said.
Fels said that NSW policyholders should not have to pay more than is necessary to recover the ESL.
“Any unreasonable price increases will be subject to scrutiny from my office,” said Fels.
There will be a transition period of two years, 2017-2018 and 2018-2019, after which time insurers will have to justify their adoption of the levy.
In March 2017, the Insurance Monitor released a report finding a huge disparity in the premiums charged for home insurance in NSW.
The report found that some insurers were charging up to $1,100 more than their rivals for the same cover of the same house.
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