New South Wales Emergency Services Levy
Insurers (including their brokers, coverholders or service companies)(1) writing relevant classes of business in New South Wales (NSW) are required to charge an Emergency Services Levy (ESL) alongside the risk premium to cover their contribution to the emergency services annual budget.
It is the responsibility of these insurers to ensure that they are charging an appropriate rate to reflect their market share and so fund their portion of the budget.
The NSW government has recently published their half-yearly budget update. This has highlighted that the expected revenue from ESL is AUD967m in 2019/20 (an increase from AUD780m in 2018/19). A further increase to AUD1,131m is anticipated in 2010/21.
As previously advised (in LMA17-030-PD – 04 August 2017), many local entities utilise the services of Professional Financial Solutions (PFS) to assist them in determining the ESL rate they should charge in order to cover their liabilities to the emergency services budget. A similar service has been offered to syndicates. Should you wish to discuss this offering, Doug Drysdale (PFS) can be contacted at dougdrysdale@pfsnet.com.au or +61 2 9225 6117.
Following legislative changes in 2018 (including the introduction of an Insurance Monitor in NSW to monitor and penalise over-collection of ESL by insurers), the Australian Fire Brigade Charges Scheme (AFBCS) Third Reference Manual has now been amended and re-published as the Fourth Reference Manual. All managing agents received a copy of the updated manual in December 2018.
Lloyd’s Australia will be sending a similar communication to members of the AFBCS in Australia.
Managing agents should also keep abreast of requirements imposed by the Emergency Services Levy Monitor. The notices that have been issued can be found on the website.
If you have any further questions, please contact Patrick Davison - patrick.davison@lmalloyds.com or
020 7327 4595.
Patrick Davison
Manager, Property, Reinsurance and Delegated Underwriting
(1) Section 3 of the Emergency Services Levy Act 2017 (NSW) defines an insurer as:
“a person, partnership or association who (whether as an underwriter or otherwise):
a. issues or underwrites liability under policies of insurance against loss or damage to property situated in the State
b. receives premiums in respect of policies or insurance against loss or damage to property situated in the State on behalf or for transmission to a person, partnership, association or underwriter outside the State.”
committee memberships are as representative of their market sectors as possible
|