NIBA understands that the Victorian Government is proceeding with its plan to increase the rate of FSL applying to companies with very significant Victorian assets ($50 million insured value) in lieu of charging FSL on deductibles of over $10,000. The proposed new arrangements are scheduled to commence from 1 July 2007.
Draft regulations, together with a regulation impact statement containing a cost-benefit analysis of the proposed arrangements, should be issued for public consultation shortly. The public will have a month to comment on the draft regulations.
NIBA will be making a submission opposing the new arrangements. NIBA’s submission will indicate that while this scheme is more workable than the initial proposal for applying FSL to deductibles of over $10,000, increasing FSL for very large companies that operate in Victoria will add to broker and business costs, and work against the introduction of effective risk management, without producing a comparable increase in equity.
If the arrangements are to commence on 1 July 2007, the Victorian Fire Services Authorities will need to issue payment guidelines early in May at the latest.