Proposed levy on all general insurance policies

All Australians with a car, home or travel insurance policy will have to pay a levy via their premiums to help bail out policyholders of the collapsed HIH Insurance under a proposal from the Insurance Council of Australia.

Yesterday the ICA put forward the proposal to impose a 1 per cent levy on all general insurance policies. The levy is expected to raise between $100 million and $150 million to help bail out those customers hardest hit by the insurer’s collapse.

The state governments are also being asked to chip in by offsetting the impact on consumers by reducing the taxes on insurance policies.

The NSW State Treasurer and QLD government is opposed to the plan saying the burden will be carried by the consumers and state governments while the Federal government and insurance industry shoulder none of the responsibility.