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Angry insurers say Fels has stepped over line

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The Insurance Council of Australia (ICA) has made an official complaint against NSW Emergency Services Levy Insurance Monitor Allan Fels, accusing him of stepping outside his remit and failing to listen to industry concerns.

Professor Fels was engaged by the NSW Government to monitor insurance pricing after the removal of the emergency services levy on insurance – something that never happened following a last-minute deferral.

Despite the reform’s delay, Professor Fels has remained in the post, and relations with insurers have soured as he has used data to attack them on a range of issues, most recently a so-called “loyalty tax”.

Now he has widened his demand for data from the insurers, sparking their fury and an official complaint from ICA.

A previous order issued by Professor Fels focused only on home and contents policies, but a new order requires additional comparative pricing data for motor and commercial policies, as well as disclosure of fees paid to intermediaries. He has given insurers eight months to comply.

In a letter seen by insuranceNEWS.com.au, ICA calls on NSW Treasurer Dominic Perrottet to force Professor Fels to withdraw the demand.

“The Insurance Council is concerned that in issuing the order, the monitor has acted outside his powers,” the letter says.

“Further, the order has been issued without following the appropriate consultation process and without due regard for the impact that such requirements would have on the insurance industry.”

ICA argues that while Professor Fels has the right to demand data from insurers, it has to be relevant to his role as Insurance Monitor.

“The information which the monitor can require insurance companies to provide is limited to information about emergency services levy reform,” the letter says.

“[The relevant legislation under which Professor Fels operates] does not provide the monitor with unlimited power to issue a notice to require an insurer to provide any information which he specifies.

“As the emergency services levy reform has been indefinitely deferred, the Insurance Council considers that the monitor has no basis … to require insurers to provide comparative pricing information.”

ICA says the industry was not properly consulted about the new order, and that Professor Fels did not act on any of its concerns.

“The Insurance Council requests that the minister issue a general direction in writing to the monitor that the monitor withdraw the order,” the letter concludes.

ICA spokesman Campbell Fuller told insuranceNEWS.com today the contents of the letter are confidential, but confirmed it has been sent.

“The Insurance Council of Australia confirms a letter has been sent to NSW Treasurer Dominic Perrottet raising concerns that the ESL Monitor may be acting outside his powers under the Emergency Services Levy Insurance Monitor Act 2016 (NSW),” he said.

“The letter relates to a recent notice sent to insurers.”