FSL MONITOR FELS ASKS INSURERS TO ATTEND PUBLIC HEARING

Allianz, CGU, RACV, QBE and Suncorp have been asked by Victorian Fire Services Levy (FSL) Monitor Allan Fels to attend a public hearing in Melbourne on June 18 and 19, where they will be asked to clarify their pricing practices. Suncorp said that it would attend, while the Insurance Council of Australia said that insurers were already co-operating and acting in a transparent fashion. Allianz said that it had co-operated and that "Having regard to that, we do not think it appropriate that the monitor mention Allianz in the media in any context that might imply that it is not acting appropriately in relation to the removal of the FSL". The FSL has been removed from premiums and added to homeowners' rates. CGU said that it had spoken directly to the monitor's office on the six complaints that it had received. Professor Fels has asserted that most insurers front-loaded their FSL collection, permitting them to lower prices later while still collecting their full liability. Insurers were concerned that, if rates had been constant through the year, insureds, particularly in the commercial sector, would have chosen to go uninsured towards the end of the financial year in order to avoid paying a full-year's levy.