New Zealand: Fire Service Levy

The New Zealand Fire Service Commission is currently conducting a consultation on a proposed increase in the levy rates on contracts of fire insurance. The Fire and Emergency New Zealand Bill will amend the mechanism for calculating the levy reflecting the wider scope of the activities undertaken by the fire services. It is important to note that this is an amendment to the existing regime, rather than an overhaul of the current collection method.

From 1 July 2017, the New Zealand Fire Service (NZFS), National Rural Fire Authority (NRFA) and 38 Rural Fire Authorities will amalgamate to become one organisation – Fire and Emergency New Zealand (FENZ). To maintain the current levels of service provided, and establish FENZ over the next four years, the Fire Service Commission is proposing to increase the rates of levy.

In the 2017/18 year, the proposed levy funding for FENZ will continue to be assessed on contracts of fire insurance. The current exemptions set out in the Fire Service Act 1975 will remain in place.

The Commission proposes that from 1 July 2017 until 30 June 2018 the rates of levy are to be set as follows:

• For residential property: increase from 7.60 cents per NZD 100 insured to 10.60 cents per NZD 100 insured (insured amounts capped at NZD 100,000 for residential buildings and NZD 20,000 for contents);
• Non-residential property: increase from 7.60 cents per NZD 100 insured to 10.60 cents per NZD 100 insured (uncapped); and
• Motor vehicles (less than 3.5 tonne): increase from NZD 6.08 (flat rate) to NZD 8.45 (flat rate).

The full implementation of the new funding arrangements would come into effect on 1 July 2018. The consultation for the 2018/19 levy will include all aspects of the new funding arrangements, such as:

• Enlarging the levy base by calculating the levy on material damage insurance contracts rather than only fire insurance;
• Assessing the levy on third party motor vehicle insurance;
• Differential rates for residential and non-residential policies;
• Revised caps for residential property and personal property; and
• New exemptions from the levy (if made under regulations).

We will keep the market updated on developments as appropriate.

Further information

For further information please contact:

Lloyd's International Trading Advice

Primary point of contact for advice and information
on Lloyd's trading status worldwide.