Sharechat Logo

Woods fast-tracks agreed EQC legislative changes, leaving thornier questions to inquiry

Tuesday 20th March 2018

Text too small?

Earthquake Commission Minister Megan Woods has fast-tracked four widely supported changes to the law governing the EQC, including a higher cap for residential property and ditching the entity's contents cover, leaving more contested issues to an upcoming inquiry. 

The government expects to pass legislation before the end of the year changing the EQC to lift the cap limit to $150,000, let the agency accept claim notifications for up to two years from a natural disaster, drop contents cover, and clarify EQC's information sharing, Woods said in a statement. Those changes are expected to come into effect from July 1 next year. 

"These are widely agreed, common sense changes that can be made before the independent inquiry into EQC," Woods said. "I’ve asked for them to be brought forward so that, if the worst did happen and we had a major event shortly, these changes will have been made." 

Woods tasked an independent ministerial adviser to speed up EQC's Canterbury claims, with the report expected to provide advice on operational changes needed to resolve residual claims in a manner which ensures timeliness, cost effectiveness and high professional standards.

The terms of reference allow for recommendations on how to improve claims management; operational, resourcing, policy or legislative constraints faced by EQC; any issues caused by the entity's processes that hold up timely resolutions; ongoing monitoring of the quake claims; and any other related matter. 

"These are changes that can be made now without having to wait for the outcome of the upcoming inquiry," she said. 

Today's changes adopt two of the high-level reforms flagged by the previous administration, being the increased cap and removal of contents insurance. The former government had also planned to clarify that EQC land was for natural disaster damage directly affecting an insured residence or access to it, standardise claims excess on EQC building cover at $1,000, and require EQC claimants to lodge claims with private insurers who will act as the contact point. Those will now be addressed in the inquiry. 

In 2015, the former government released nine proposals in a discussion document, with the preferred package including plans for private insurers to largely manage claims, building cover including site work to remove an overlap between land and building cover, doubling the cap on building cover to $200,000 while land cover would apply only where rebuilding is not possible. It also proposed lifting standard building claims excess to $2,000 and dropping EQC's contents coverage.

The review, led by the Treasury, was launched in September 2012 to consider the Crown's disaster contingency fund's future after its resources were exhausted by the Canterbury quakes that caused billions of dollars of damage and killed 185 people.

The government of the day got a hurry-up on the review in 2015, putting out the discussion document five months after global reinsurers publicly grumbled that the delays were making it difficult for them to operate in an uncertain environment.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZD headed for 0.6% weekly gain against greenback
PREVIEW: RBNZ tipped to keep cash rate at 1.75%, reiterate next move could be up or down
Sky TV hires Deloitte partner as fill-in CFO
Vector fined $3.6 mln in industry first
SIS Group to partner with Platform 4 Group
Dry weather cutting dairy production, boosting power costs
22nd March 2019 Morning Report
NZ dollar dips back below 69 US cents, focus shifting to RBNZ
Top Energy's geothermal expansion to cut lines charges
MARKET CLOSE: NZ shares rise on Fed restraint, local GDP growth; Auckland Airport slides

IRG See IRG research reports