The Insurance Council of New Zealand (ICNZ ) has expressed its support for the changes to the Earthquake Commission (EQC) Act announced by the government.
The announcement is the first step in improving the EQC and its responsiveness to major disasters, ICNZ chief executive officer Tim Grafton said.
“We support the changes announced by the minister and are hopeful that lessons learned from the upcoming inquiry into EQC will lead to further change,” he said.
In the announcement, Minister Responsible for the Earthquake Commission Megan Woods outlined the changes, which include:
Increasing the cap limit on EQC residential building cover to $150,000 (plus GST);
Enabling EQC to accept claim notifications for up to two years after a natural disaster, rather than the current three-month time limit for such notifications;
Removing EQC insurance cover for contents;
Clarifying EQC’s authority to share information to support the implementation of the EQC Act and settlement of insurance claims and where this is in the public interest and safety (a
recommendation of the Canterbury Earthquakes Royal Commission).
“The lifting of EQC cover to $150,000 (plus GST) acknowledges the fact there has been no change in the level of cover provided in the act since 1993,” Grafton said. “The transfer of contents insurance from EQC to private insurers logically reflects the need to focus EQC cover on what is most needed after a disaster: rehousing people.”
He also pointed out the proposal to clarify that EQC can share information with insurers to assist in the settlement of insurance claims as an important provision. “The last thing that’s needed when you are trying to settle claims after a catastrophe is bureaucratic hurdles creating delays when information sharing is essential to speed recovery and safeguard people,” he said.
However, he added, there is still further work required around the management of claims.
“We believe insurers should manage and settle all claims, including those under cap, as agents for EQC,” he said.
“It’s insurers who have the relationships with customers and the bulk of resources, and will already be involved in settling contents claims in any event.
This arrangement has been tested and proven by the response to the Kaikōura earthquake, the recovery of which has progressed far more smoothly and efficiently than was seen in Canterbury.”