Local Govt | National News Video | Parliament Headlines | Politics Headlines | Search

 


Formal review of Christchurch City Council Insurance

Media Advisory 24 September 2013

From: Cr. Helen Broughton, Chair of the Corporate and Financial Committee, Christchurch City Council

Subject: Formal review of Christchurch City Council Insurance


The Christchurch City Council is undertaking a formal review of a number of issues relating to the Councils insurance by an independent barrister QC.

The review follows a decision ratified by the Council on the 25 July that was publicly excluded. However, at a subsequent meeting of the Corporate and Financial Committee, I successfully moved that the decision regarding this review should be taken out of Public excluded.

The decision being announced today was delayed until matters concerning the CEO future were resolved.

Background

For some time I have been one of five Councillors (Cr’s Tim Carter, Glenn Livingstone, Yani Johanson and Jimmy Chen) concerned about a number of issues with respect to the Council’s insurance.

Regrettably, a number of our colleagues had previously believed that there was no basis for these concerns, which delayed advancing this review. However, as more information became available it was clear that they better understood why a review was required.

In announcing this review, I would also like to acknowledge the concerns previously expressed (June 2012) by Canterbury Employers' Chamber of Commerce chief executive Peter Townsend, about the low insurance valuations of some quake-hit council facilities. I note that at that time, Mr Townsend said the council needed to investigate these issues further.

I also believe that when considering why this review is important, one must also consider the report following the: “Inquiry (19 April 2012) into how Christchurch City Council managed conflicts of interest when it made decisions about insurance cover.” http://www.oag.govt.nz/2012/christchurch-city-council-inquiry

Focus of insurance review

There are three areas of concern;

1. The appropriateness of the placement of the Council’s insurance with Civic in 2009 and the consequent placement with LAPP in 2010.

*The Council moved in 2009 from NZI to Civic at the firm direction of “executive management”

o It has been public record that the movement from Civic to Lapp 2010 was outside delegated authority. The GM Finance signed off on this transfer alone, when the delegated authority is for the GM Finance and the CEO. [ The CEO could not do this as he was on Civic}- However in this situation the signoff should have come to Council.

o Civic is largely dependent on reinsurance monies.

2. A detailed assessment of the strength of Council’s contractual position with Civic.

3. A review of the two contracts referred to by Judge McKenzie in his judgement in the Civic versus R and V Versicherung of 9 April.

There are two contracts- the original dated June 2010 and a replacement policy dated 20 September 2012. To quote directly from Justice McKenzie:

“The replacement policy asserts there were errors in the original contract. There must be a proper and full enquiry into whether that is so. The reinsurer’s liability depends on the interpretation of the original contract not the replacement contract.”

The Judge also refers to complexity with respects to the relationship between Civic and Lapp and contractual issues raised from this.

Why is this review important?

The role of this review is to ensure that we understand:

1. where and why mistakes were made;

2. what are the implications to the council and its ratepayers; and

3. what changes need to be made to ensure that we don’t make the same mistakes again?

Normally insurance contracts with reinsurer’s mirror the contract between the contract between insurer and entity {CCC} .We need to establish if this was the case In Christchurch’s contract.

The Corporate and Financial Services Committee will receive an initial report by the end of the month. At that time, the committee will need to determine if the scope needs to be widened and whether central government needs to be involved.

In announcing this review, I will be writing to the Minister of Local Government and the Minister of Earth Quake Recovery to brief them on this matter.


ENDS


© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

PARLIAMENT TODAY:

  • Week in Parliament 22-05-15
  • Saturday Sitting
  • House Rises At Midnight
  • Telco Levy Bill Passes
  • Telco Levy Bill Completes First Reading
  • Social Housing Bill Passes Under Urgency

  • TPPA: University Of Auckland Warns Of Negative TPP Impact

    The University of Auckland May 20, 2015 University of Auckland Warns of Negative TPP Impact With the Trans Pacific Partnership (TPP) negotiation drawing to a close, the University of Auckland has expressed serious concerns about its potential implications. ... More>>

    NZ Flag: Flag Referendum Gets Hit Hard In New Poll

    The latest Campbell Live text poll confirms it is time for the Prime Minister to listen to the public and shelve his flag referendum, says the New Zealand First Leader Rt Hon Winston Peters. More>>

    Gordon Campbell: The Government’s Belated Moves On Property Speculation

    Is it a property tax on capital gains or a capital gains tax on property? The Jesuitical distinctions in the government’s spin about its latest moves on property speculators are all about whether the government can claim that it jumped, or confess that it ... More>>

    Grant Robertson:
    Key Can’t Just Be Prime Minister For Parnell

    John Key must show New Zealanders in next week’s Budget that he is more than the Prime Minister for Parnell, and is also the Prime Minister for Pine Hill, Putararu and Palmerston North, Labour’s Finance spokesperson Grant Robertson says. In a ... More>>

    Labour Party: More Regional Jobs Go In Corrections Reshape

    News that 194 Corrections staff are to lose their jobs will have ramifications not only for them and their families but for the wider community, Labour’s Corrections spokesperson Kelvin Davis says. Prison units at Waikeria, Tongariro and Rimutaka ... More>>

    ALSO:

  • NZ First - Prison Job Losses to Send Money Offshore
  • TPPA: ‘Team Obama’ Regroups On Fast Track, Still Not Deliverable

    ‘After yesterday’s stinging and unexpected defeat for the Obama administration’s attempt to advance Fast Track legislation in the US Senate, Senate leaders have worked up a compromise they think will get them past this blockage’, according to Auckland ... More>>

    NZ Government: 5,500 More Doctors And Nurses In Our Hospitals

    Health Minister Jonathan Coleman says a record number of doctors and nurses are working in District Health Boards across the country. More>>

    Controller and Auditor General: Katherine Rich Conflict of Interest Decision

    We are writing to you about a matter that has been raised with us by members of the public. More>>

    ALSO:


    Budget 2015: Andrew Little On The 2015 Budget

    Speaking to the Chamber of Commerce, the Labour opposition leader attacked the government’s approach to economic issues facing New Zealand. He said they have been “more than reckless in their complacency” and “the next week’s budget will do nothing ... More>>

    Defence Force: NZDF Building Partner Capacity Mission Personnel In Iraq

    NZDF Building Partner Capacity Mission Personnel in Iraq The New Zealand Defence Force Building Partner Capacity training mission contingent is in place at Taji Military Complex in Iraq. The Chief of Defence Force Lieutenant General Tim Keating says the ... More>>

    PM Press Conference: ACC Levy Cuts Announced

    In a press conference this afternoon in Wellington, ACC Minister Nikki Kaye proposed $500 million worth of ACC levy cuts. More>>

    Quakes: New Process For Red Zone Crown Offers

    Canterbury Earthquake Recovery Minister Gerry Brownlee has announced a process to give everyone a say on the Crown offers to owners of vacant, commercial/industrial and uninsured properties in the Residential Red Zone. More>>

    ALSO:

    Gordon Campbell: On The Battle Obama Is Waging Over The TPP

    For the past two and a half years, this column has been arguing that the fate of the Trans Pacific Partnership (TPP) deal will hinge on whether US President Barack Obama can win Trade Promotion Authority (TPA) from Congress... Last week, the White House finally, finally unveiled a draft TPA Bill. More>>

    ALSO:


    Gordon Campbell: On lessons for Labour from the UK election
    If the polls were right – and the pollsters kept telling us how accurate they’d been in 2010, and even Nate Silver was getting the same results – there seemed no way that the British Labour Party could lose last Thursday’s British election. With Labour predicted to win around 270 seats and the Scottish National Party batting around 55-60 seats, Labour seemed to be home free. But…as we now know, things didn’t turn out that way. Labour ended up with 232 seats and the Conservatives swept back to power with an outright majority, after winning only a little more than a third ( 36.9%) of the votes cast.MORE >>
    Also.

  • NZ PM John Key - PM congratulates David Cameron after UK election
  • The Nation IV Transcript - Hack Attack author Nick Davies
  • Get More From Scoop

     

    LATEST HEADLINES

     
     
     
     
     
    More RSS  RSS
     
     
     
     
    Regional
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news