NSW insurance companies will be forced to show the price a customer paid for the previous year's property insurance on renewal notices from July 1 under reforms to how fire and emergency services are funded.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The rule is designed to provide transparency in the savings insurers are expected to pass onto customers when a levy used to fund fire and emergency services in NSW is removed from insurance policies in favour of a new property-based tax.
The requirement will be announced by former corporate regulator Professor Allan Fels during a public inquiry into NSW insurers at state Parliament on Tuesday.
Professor Fels has been appointed by the NSW government as Emergency Services Levy Insurance Monitor to ensure that insurance companies pass on savings to customers.
The monitor is charged with ensuring insurers drop residential insurance premiums by up to 20 per cent and can apply penalties of up to $10 million to companies breaking the rules.
It says insurers have been compelled to attend the public inquiry to answer questions about how they price their insurance policies ahead of the change.
"Today's inquiry is firstly and foremost about accountability," Professor Fels said.
"It's a good opportunity for insurers to show what they are doing and how they plan to do the right thing by their customers when the [emergency services levy] is removed on July 1.
"The removal of the Emergency Services Levy from insurance policies should not be used to restore or increase insurer profit margins."
A spokesman for the Insurance Council of Australia said insurers "will do the right thing by NSW consumers as they did in Victoria when that jurisdiction removed its Fire Services Levy in 2013".
"Insurers are aware of the Emergency Services Levy Insurance Monitor's expectations [of the requirement to list the previous year's price] and are seeking to comply at short notice," he said.
"This was only made formal in a notice gazetted last Friday. It was previously a best-practice recommendation contained in a guideline that the Emergency Services Levy Insurance Monitor issued late last year."
From July 1, NSW property owners will be charged the new Fire and Emergency Services Levy based on land value determined by the NSW Valuer-General.
The government has estimate the average levy will be $185 but the change is angering many property owners who will pay much more under the new regime.
