State and territory treasurers have been called on to drop stamp duty on new insurance policies businesses have been forced to purchase because of the collapse of HIH.
The Association of Risk & Insurance Managers of Australasia's (ARIMA) president Bruce Ferguson says the other alternative is for governments to refund stamp duty already charged on policies that are now worthless.
"The state and territory governments are double dipping on stamp duty, and fire-service levies in those states which charge fire levies," he says.
"Corporate insureds, which get no help from the federal government's rescue package, have already paid substantial duties on policies bought before HIH's collapse.
"They are now paying again and, because the duties are a percentage of the premiums, they're paying far more because insurance costs have risen since the HIH demise.
"State and territory governments must alleviate some of the burden for corporate insureds, or face the consequences as more companies collapse, putting the economy into a nose dive."
Only two states have offered insurance buyers any concessions on stamp duty.
New South Wales had a three-month moratorium on stamp duty for policies to replace HIH covers, while the Tasmanian government is refunding duty on replacement policies, although businesses have to apply for the refund.
State and territory governments' stamp duties range from 8% to 11%. Fire-service levies range from nil in some states to as high as 20% in Victorian country areas.
A new international comparison by Deloitte Touche Tohmatsu shows Australia holds the "world record" for insurance taxes. To read more on the comparison, click
here.