Insurer avoids fire service levy fine after refunding $1.1m

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QBE has avoided a possible fine at the hands of the Victorian Fire Services Levy Monitor after agreeing to pay back $1.1 million to policyholders.

Professor Allan Fels has accepted a court-enforceable undertaking from QBE, after an investigation found almost 11,500 property insurance policyholders had overpaid on their premiums after programming errors did not properly remove the Fire Services Levy after the tax was abolished on 30 June.

“QBE has responded appropriately by initiating measures to correct the identified problems and provide redress for affected customers,” Fels says.

QBE CEO Colin Fagen says they take their obligations seriously.

“As soon as we identified the error we acted immediately to correct it, apologise and provide refunds to those customers impacted and inform the Monitor,” he says.

Meanwhile, last month NIBA representatives – President David Wyner, Victorian Chairman Mark Laudrum and CEO Dallas Booth – met with Fire Service Levy Monitor’s Office to respond to a number of advertisements from the Monitor warning Victorians who used brokers to ensure they were not being charged the FSL.

We pointed out that a great deal of explanation is done face-to-face with clients, rather than via marketing material.

Booth says the Monitor’s Office has received a number of complaints and expected to see greater efforts by the insurance industry to explain the levy’s removal to the policyholders.

“NIBA representatives stressed the role insurance brokers had played for a number of years in calling for the removal of the Fire Services Levy,” Booth says.

“In relation to communication with clients, we pointed out that a great deal of explanation is done face-to-face or verbally with clients, rather than via websites or other marketing material.”

Nonetheless, NIBA has produced a flyer, available here, which can be shared with clients.

“In the meantime, all Member Principals are urged to ensure systems and processes are in place to prevent Fire Services Levy being charged on policies renewed after 1 July 2013,” Booth says.

Also, brokers who are arranging Victorian property insurance with unauthorised foreign insurers have been reminded to insure that their s44a and s80a returns are lodged before 16 December. For more information, see this letter from the MFB and CFA.