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The New South Wales Government had planned to replace emergency services levy (ESL) in New South Wales (NSW) with a new property-based levy from 1 July 2017, but the Government has deferred this and re-established ESL.

This information page has been prepared by AIG Australia Ltd (AIG) to explain how ESL continues to apply to insurance in NSW. As with the previous ESL insurance funding scheme, AIG is committed to ongoing compliance with the re-established ESL requirements and having regard to applicable ESL guidelines


The information relates to NSW only.


What is ESL?

The ESL is a levy on general insurers to fund emergency services organisations.

ESL is based on the premiums for certain types of insurance policies.

Most Australian States and Territories have phased out this type of levy on insurance, also called fire services levy - other than New South Wales (NSW) and Tasmania. In NSW insurers (and their policyholders) still fund 73.7% of the total cost for emergency services.

What types of insurance policies does ESL apply to?

ESL applies to these types of policies:

·            property (including consequential loss),

·            house building and/or contents,

·            personal effects (including jewellery, clothing and works of art),

·            motor vehicle and motor cycle,

·            marine and baggage,

·            crop and livestock.

Different rates of ESL contribution apply across the types of policies, with property and house building and/or contents insurance being subject to higher rates than the other types.

How does an insurance company contribute and charge ESL?

Each insurer pays a total contribution to the NSW Government for ESL for each emergency services funding year, which commences 1 July. The contribution is set by the Government and adjusted according to the insurer’s market share within the year.

The insurer in practice needs to collect and fund this contribution by charging an ESL component on individual insurance policies, as a percentage of the base premium, which is the premium before government levies and taxes are added. This in practice normally applies to any premium, whether for a new or renewal policy or mid-term change.

The other levies and taxes are then added in the following order:

·            base premium, plus

·            ESL, plus

·            Federal (Commonwealth) goods and services tax, plus

·            NSW stamp duty (where applicable).

ESL is therefore subject to GST and stamp duty on top of the ESL itself. Where a policy covers locations inside and outside NSW, the ESL will apply only to the NSW part of the overall premium.

The percentage of ESL charged may vary between insurers. This is due to several reasons, including differences in the insurers’ total contribution, market share and other factors.

By charging ESL components on individual policies, each insurer aims to collect no more and no less than its total ESL contribution.


What is the new property-based levy?

In December 2015 the NSW Government announced that it intended to replace the ESL insurance funding scheme with a new property-based levy to be paid alongside council rates from 1 July 2017. This was to be similar to other States and Territories.

In anticipation of the new levy, AIG and many other insurers had progressively decreased ESL rates in the lead up to 1 July 2017, and insurers and the Government had done considerable preparation work. AIG had ceased charging ESL in the months prior to that date in most cases.

When was it deferred and ESL re-established?

On 30 May 2017 the Government announced it was deferring the introduction of the new levy.

The Government stated that ESL will be re-established and continue to be collected via insurance policies until the completion of a reform policy review. This was done effective from 1 July 2017 and ESL applies again in NSW. At this stage, there has been no date announced for the introduction of the new scheme.


How can policyholders find out about any ESL or base premium movement?

For most types of policies ESL will be listed as a separate component together with the total estimated or actual premium.

Where ESL is not required to be separately listed, you can confirm the amount with your insurance broker or AIG.

Any ESL movement will generally be due to one or more of the following factors:

  • a different rate of ESL applies than before, because of changes in AIG’s view of ESL rates required to recoup its contribution or in the total ESL contribution levels,

  • the base premium has changed, and this has changed the ESL amount.

If there is a base premium movement, this could be due to one or more of the following:

  • indexation of sums insured,
  • mid-term changes to the policy,
  • a general increase applicable to all similar policies,
  • specific to your policy, such as for claims history.

AIG will in many cases confirm to your insurance broker the reasons for any material ESL movement or base premium movement. You can also confirm the explanation for either movement with your broker or AIG.

AIG’s movements in ESL charged reflect its view of the amount required to recoup its ESL contribution.

Can policyholders compare renewal premiums to last year?

Yes – your insurance broker probably already does this for you. As well, from 1 July 2019 price comparisons are included in applicable renewal documentation for these classes of insurance:

  • home building and contents insurance,
  • personal combined insurance (jewellery and clothing, personal effects and works of art),
  • other property insurance (individuals and small business only),
  • motor vehicle and motor cycle insurance (individuals and small business only).

You can also request a comparison of the total premium and its components, including ESL, to compare to last year.

The Emergency Services Levy Insurance Monitor was established in June 2016 as an independent body. One of its functions is to monitor the prices for the issue of regulated contracts of insurance. Professor Allan Fels AO and Professor David Cousins AM have been appointed by the NSW Government as the Emergency Services Levy Insurance Monitor and Deputy Monitor, respectively.

Another of the functions of the Insurance Monitor is to assess any over collection of total ESL contribution by an insurer

If you would like further information

Contact your insurance broker in the first instance, or AIG via email at, if you have questions about your policy.

Information about the Insurance Monitor can be found at: