Furious insurers have warned the decision to defer indefinitely the planned introduction of the Fire and Emergency Services Levy from July 1 "will increase premiums for policyholders" as it will cost them tens of millions of dollars.

But on Wednesday, the Premier said that "policyholders won't be paying a single dollar more than they would have done and we have an insurance monitor to make sure that will happen".

The change would have shifted the way fire and emergency services are funded in NSW from a tax on insurance companies passed onto policyholders to a tax on most property holders.

Ms Berejiklian said on Tuesday the change would be deferred over concerns that property owners - particularly small and medium-sized businesses - would be unfairly hit with steep rises.

Professor Allan Fels was installed as Emergency Services Levy Insurance Monitor in parallel with the planned change to ensure that insurers pass on the savings to policyholders once the old levy is removed from premiums.

The deputy monitor, Professor David Cousins, told Fairfax Media he was "sceptical" about the industry's claims that polices would need to rise because of the deferral.

"For a start, if they're costs that have been incurred in the past, they're not going to impact on future premiums," he said.

"That's an issue that obviously we would look closely at.

"In any event, given the millions of insurance policies that are around, they would have an infinitesimally small effect on premiums," Professor Cousins said.

The monitor has the power to issue fines of up to $10 million to insurers found to have been doing the wrong thing.

Professor Cousins said existing legislation empowered the monitor to keep tabs on insurers trying to recoup costs they claimed to have incurred in preparation for the change.

However, Insurance Council of Australia spokesman Campbell Fuller said the industry "is seeking clarification on the powers of the monitor".

Mr Fuller said insurers will be incurring costs associated with the deferral and that "these costs will need to come from somewhere".

"If the Premier believes they should not come from policyholders, then the industry is open to a discussion about where they should come from," he said.

Mr Fuller said insurance company representatives are due to meet Treasurer Dominic Perrottet on Thursday to seek clarification "on all aspects of the government's intentions".