VICTORIA FIRE SERVICES LEVY CUT-OFF DATE MIGHT BE EXTENDED

The government of the Australian state of Victoria might extend the cut-off date for the Fire Services Levy beyond July 1, reports insurance.com.au, citing unnamed insurance industry sources. The government is considering extending the date because of confusion about what will happen in the transition period. For commercial insurers the FSL can amount to as much again as the cost of the original policy. From July 1 2013 the burden was meant to transfer to local rates. However, insurers had previously been told that they were expected to charge the levy right up to June 30 2013, which would mean consumers would effectively be paying a full year's FSL for as little as one day's protection. Victoria State Treasurer Kim Wells said that "the Government is working with the industry to ensure the fire services levy is administered fairly during this period", and promised that "further details will be provided in coming weeks". If the current "double-charge" situation is not resolved, insurers fear that some policyholders will "cancel and renew", thus obtaining back the unused levy before buying a policy that has no levy attached. If insurers remain obliged to pay the full levy to the state on all policies sold before July 1 2013, they will have no way to gain back the shortfall. As a result, insurers have asked the government to make such levy avoidance schemes illegal (IIN 24, May 23 2012).