NIBA writes to Minister on broker ESL issues

NIBA has written to the NSW Minister for Finance, Damien Tudehope to discuss the difficulties brokers face when placing risks located in New South Wales with foreign insurers.

Written on 1 September, 2021
Allyssa Hextell

The National Insurance Brokers Association (NIBA) CEO, Dallas Booth has written to the New South Wales Minister for Finance, Damien Tudehope to discuss the difficulties insurance brokers face when placing risks located in NSW with foreign insurers.

Booth revealed that NIBA has long argued that the current funding method is inequitable and inefficient as it artificially inflates premiums and discourages policyholders from appropriately insuring their risks.

In addition, the scheme presents a number of difficulties for brokers who are treated the same as insurers for the purposes of ESL collection.

Collecting the correct amount of ESL is an incredibly difficult and expensive process for brokers who are forced to place NSW risks overseas due to a lack of availability in the domestic markets.

Brokers are not able to determine with any degree of confidence whether they have collected sufficient levy until well after the financial year has ended and, in many cases, well after the policy period has expired. These difficulties are only exacerbated by the significant changes to the ESL contribution target which makes predicting liability under the scheme almost impossible.

NIBA has requested a meeting with the Minister to discuss these and other issues with the levy to find a solution that does not penalise brokers for looking after their clients.