EQC review needs settlement focus – Labour
Tue, 18 Sep 2012 3:04p.m.
A review of the Earthquake Commission's functions needs to go further and look at how the organisation performed in the wake of the Canterbury earthquakes, Labour says.
The Government today announced a Treasury-led review will look at the act governing the EQC, drawing from lessons of the Canterbury earthquakes and other events in the last 20 years.
It will focus on what the commission insures, how its insurance is priced, its structure, how the Crown handles its risk exposure and how it is financed.
However, it does not look at delays or other issues surrounding the settling of claims in the wake of the Christchurch quakes.
Earthquake Recovery Minister Gerry Brownlee says it is not intended to provide an audit of the commission's performance in Canterbury.
But Labour's earthquake recovery spokesman Clayton Cosgrove says that's needed.
"It takes no regard to the adequacy of the claims settlement process that we have at the moment, yet it seeks to somehow improve the performance of EQC, so there are some contradictions," he said.
"You've had two years of the claims settlement process, there are incredible learnings that can come from that.
"To launch a review headed up by a bunch of bureaucrats, with one independent person vetted by the insurance industry, that doesn't look at current practice is rather odd to say the least, when we know there are extreme difficulties in Canterbury and there have been for two years."
Mr Brownlee said one of the objectives of the review would be to lessen the financial burden on the Crown when it came to private property damage in natural disasters.
Last November EQC chairman Michael Wintringham, when releasing its annual report detailing a $7.1 billion loss, questioned whether household contents should be covered by the commission.
He says contents claims for goods damaged in the quakes made up a fraction of the total costs but contributed a disproportionate share of time and costs for claims staff.
EQC has received more than 500,000 building and land claims from the Canterbury quakes, with its total claims expense estimated at around $12.2 billion.
It has paid out more than $3.3b to date.
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