Australia: Emergency Services Levy

The guidance below has been superseded. Please contact LITA@lloyds.com for any queries.

Background

An Emergency Services Levy (ESL) is currently charged on contracts of insurance in New South Wales (NSW), in addition to risk premium, to contribute to the emergency services annual budget.

As of 1 July 2017 a property based levy collected alongside council rates will be used to ensure that all property owners contribute towards emergency services rather than only those who seek to insure their properties. Accordingly, insurers and coverholders must ensure that they do not continue to charge for the ESL following the implementation date.

Action Required

The NSW ESL Monitor requires insurers to send out a Prescribed Notice. If the business is being written through coverholders you will need to ensure the coverholder is issuing the notice. For open market placements or line slips, the responsibility will be on the managing agent to ensure the local broker is provided with the notice. It is a legislative requirement to issue an invoice or statement as to the price payable for a regulated contract of insurance. It is an offence to omit to include the information contained in the Prescribed Notice when issuing an invoice or statement.

The market is reminded of the information in the LMA bulletin published earlier this year which provides further detail on this disclosure requirement.