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

Gordon Campbell:
On The Team Behind Trump's Throne

Forget the Putin factor. Daily, the team of charlatans, bigots and stunningly ignorant crackpots that Trump is appointing to head key federal agencies is just as alarming. These are positions with vast power and budgetary discretion over policies that stand to affect tens of millions of vulnerable Americans. Sad! More>>

 

Gordon Campbell: On Bill English, Abroad

If David Cameron was the closest thing John Key had to a political mentor, their successors also share a whole lot in common. Theresa May and Bill English were both propelled into the top jobs as the result of unexpected resignations, and without much in the way of credible competition from their colleagues... More>>

ALSO:

Pike River: Labour Bill To Override Safety Act For Mine Entry

“Bill English has been hiding behind the legal excuse that any attempt to re-enter the mine to recover the bodies might place the mine’s owner, Solid Energy Limited, and its directors in breach of the Health and Safety at Work Act 2015." More>>

ALSO:

Gordon Campbell: On Populism And Labour 2017

For many people on the centre-left, populism is a dirty word, and a shorthand for the politics of bigotry. In this country, it has tended to be equated with the angry legions of New Zealand First. Who knew they were not just a reactionary spasm, but the wave of the future? More>>

Oxfam: 30% Of NZ Owns Less Wealth Than Our Two Richest Men

The research also reveals that the richest one per cent have 20 per cent of the wealth in New Zealand, while 90 per cent of the population owns less than half of the nation’s wealth. The research forms part of a global report released to coincide with this week’s annual meeting of political and business leaders at the World Economic Forum in Davos, Switzerland. More>>

ALSO:

Hospitals: Resident Doctors Set To Strike Again

Despite discussions between the DHBs and NZRDA over safer hours for resident doctors progressing during the last week, the strike planned for next week appears set to proceed. More>>

ALSO:

Not So Super Fund: More Burning Ethical Questions For Steven Joyce

Greens: Radio New Zealand reported this morning that the New Zealand Superfund has $77 million invested in 47 coal companies that the Norwegian Government’s Pension Fund – the largest sovereign fund in the world – has blacklisted. More>>

Activism: Greenpeace Intercepts World’s Biggest Seismic Oil Ship

Greenpeace crew have made contact with the world’s biggest seismic oil ship after travelling 50 nautical miles on two rigid-hulled inflatables off the coast of Wairarapa... Greenpeace radioed the master of the Amazon Warrior to deliver an open letter of protest signed by over 60,000 New Zealanders. More>>

ALSO:

Gordon Campbell: Why Tax Cuts In 2017 Would Be A (Proven) Bad Idea

Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves ... More>>

Get More From Scoop

 

LATEST HEADLINES

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