AU Close watch for rip-offs on fire levy
Property Here - Wednesday, April 17, 2013
Fire Services Levy Monitor Professor Allan Fels said new guidelines stressed companies could not overcharge policyholders to boost coffers before July 1. Picture: Mike Keating Source: Herald Sun
INSURANCE companies will have to clearly spell out how much consumers will save once an annual fire services charge is removed from premiums.
On July 1, the State Government's insurance-based charge that helps fund the CFA and MFB will be replaced with a rates-based tax collected by councils.
Guidelines issued today by the Fire Services Levy Monitor are aimed at minimising confusion and ensuring consumers aren't ripped off.
Fire Services Levy Monitor Professor Allan Fels said companies would have to explain the level of fire services tax they had charged in the previous year, and what premiums would look like without that charge.
"We want it to be beyond doubt that they have passed on the removal of the tax," he said. "It would be unconscionable if they pocketed anything from the removal of the tax."
The move will reduce fears companies could gouge householders despite not having to collect the fire services levy.
The monitor has the ability to slap fines of up to $10 million on corporations who break the rules. Prof Fels said there was potential for confusion once the insurance-based levy was replaced with the rates-based charge.
He said that insurance companies were already expected to benefit from the change, because cheaper policies would encourage people to take up insurance, so there was "no excuse" for not passing on discounts.
The move to force companies to provide more information to consumers comes after complaints to the monitor about high fire services levy charges slapped on some homeowners late last year.
The Herald Sun revealed earlier this month that the Monitor was probing claims of gouging.
Prof Fels said the new guidelines stressed that companies could not over-charge policyholders to boost coffers before July 1.
"If insurance companies collect more fire services levy in total this financial year than their liability, they will be required to refund this excess," he said.
Read more: http://www.news.com.au/realestate/news/fears-on-fire-levy-close-watch-for-rip-offs/story-fncq3gat-1226622966588#ixzz2QmDK56Ve