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

 

CPAG: Government Spends Over $100K Pursuing Beneficiary

For the past fifteen years, Kathryn, now in her fifties and living alone with chronic ill health on a benefit, has been challenging the decision by the MSD that she has to pay back $117,000. She has no assets or savings and cannot afford to pay for fresh food or therapy that would improve her health. More>>

ALSO:

Labour: National’s Cuts Shave $100K Off KiwiSaver By Retirement

New analysis shows National’s constant cuts to KiwiSaver will reduce the average worker’s retirement savings by $100,000 over their working life, Leader of the Opposition Andrew Little says... Since coming to office it has made five separate cuts to the scheme." More>>

ALSO:

Auckland: Transport Operators Switch From SuperGold To AT HOP Cards

Seniors using Auckland’s public transport will need to use their AT HOP cards from today but Auckland Transport has requested its operators to show understanding for those customers yet to complete the switch from SuperGold cards. More>>

ALSO:

Crime Stats: Burglary Up 11.9%

“While burglary rates are still below that of recent years, there has been an increase of more than 10 per cent over the past 12 months, which is of concern to Police and something we are determined to tackle,” says Police Commissioner Mike Bush. More>>

ALSO:

Help: Lifeline Aotearoa Fighting For Survival

Lifeline Aotearoa has announced it only has enough money to run for one more year. By 30 June 2017, all available sustainability reserves and funds from a new mortgage on its Auckland property will be exhausted. More>>

ALSO:

Overseas Investment: Auditor-General To Examine OIO

The Auditor-General is to examine how the Overseas Investment Office collects and manages information following a request from the parliament's finance and expenditure committee. More>>

ALSO:

Gordon Campbell: On Bill English Living In Denial

The working poor have been a direct byproduct of the economic policies in vogue for the past 30 years or more, all over the Western world... That anger was evident in the Brexit vote, and it underlies the support for Donald Trump in the United States. More>>

ALSO:

Final Reading Of Parental Leave Bill: Families With New Babies Victims Of Veto

“For the first time ever, a Bill will have a third reading debate and no vote will be taken at the end because the National Government has used its veto – an extreme measure against families,” says the Bill’s sponsor, Labour MP Sue Moroney. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Regional
Search Scoop  
 
 
Powered by Vodafone
NZ independent news