Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Time for Government to Get Back Into Insurance Business

Time for Government to Get Back Into Insurance Business

The Government announced this week that it has no plans to help Ansvar Insurance customers left in the lurch by their insurer’s December 31st exit from the New Zealand insurance market. That means that those unable to get new house insurance before their existing policies expire (January, in some cases) will be uninsured in further quakes and ineligible for Earthquake Commission support. And the insurance companies are not offering any new insurance coverage in Canterbury until further notice. So, this is an appalling situation for these people to be left in, through no fault of their own.

Ansvar’s desertion follows December’s announcement that IAG is buying AMI Insurance’s “good business” but leaving the Crown to deal with AMI’s “bad business”, namely $1.8 billion of Canterbury earthquake claims. That is a perfect illustration of the phrase “to privatise the profits but socialise the losses”. So, a transnational corporation that is in the business of calculating risk, managing risk and profiting handsomely from risk, doesn’t want a bar of dealing with the negative consequences of that risk.

CAFCA had no objection – particularly as a Christchurch-based organisation - when the Government agreed to underwrite AMI, back in April, rather than see it go bust, as a number of smaller insurance companies had done as a direct result of the earthquakes. But it needed to go further than just underwriting AMI and then meekly taking on that company’s “bad business” while leaving IAG to laugh all the way to the foreign-owned bank.

It is what the Government is not doing that is the problem. The Christchurch rebuild has been ground to a halt by transnational insurance companies and their offshore reinsurers doing SFA. This is nothing less than a capital strike by corporations that have creamed it big time for as long as Cantabrians, whether homeowners or businesses, have been paying insurance. Imagine the uproar if this was a labour strike. When you get prominent business mouthpieces urging the Government to step in because the insurance market is broken, and accusing the insurance companies of holding the country to ransom, you know that those companies have achieved the difficult task of pissing off everyone. Imagine what the Government would be doing if it was unions “holding the country to ransom”. But the Government is doing nothing, preferring to leave it to “the market” – which means stalemate. The widely backed call is for the Government to get back into insurance, to deal with problems that the private insurers can’t or won’t handle. After all that’s why State Insurance was founded – and that’s another example of a former public asset that was stupidly privatised (the name has been kept, because the word “State” gives credibility to a foreign-owned private insurance company).

CAFCA backs the call for the Government to get back into the insurance business, as the insurer of last resort and to most effectively respond to an unprecedented catastrophe, made worse by the December quakes. Desperate times call for desperate measures. The Government has equipped the Canterbury Earthquake Recovery Authority with emergency powers – equally, it needs to wield some big stick in the insurance market.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell:
On The Kim Regime

During the Cuban Missile Crisis, the US had a very clear objective and eventually offered a quid pro quo of the removal of some of its own missiles from Turkey. This time, there’s no clarity about what the US is seeking, or offering.

It hasn’t helped that the US and the global media consistently agree on calling North Korea and its leadership “crazy” and “irrational” and urging it to “come to its senses”. When you treat your opponent as being beyond reason, it gets hard to comprehend what their strategy is, let alone work out the terms of a viable compromise. More>>

 

Recovery: Economic Impact Of Kaikōura Quake Revealed

The report details the impact on small businesses and tourism caused by disruptions to transport infrastructure and the economic impacts... The impact on New Zealand’s Gross Domestic Product (GDP) over the first 18 months following the earthquake has been estimated at $450-$500 million. More>>

ALSO:

Human Rights Commission: Urgent Need For Action On Seclusion And Restraint

Chief Human Rights Commissioner David Rutherford says that while the report makes for sobering reading, the focus should now be on how the recommendations can be used to reduce the occurrence of seclusion and restraint in New Zealand and, in circumstances where it is necessary, to improve practices. More>>

ALSO:

CORRECTIONS (March 2017):

SCHOOL SECLUSION ROOMS (2016):

$11bn Capital Spend, New Debt Target: Steven Joyce On Budget Priorities

First, delivering better public services for a growing country – providing all New Zealanders with the opportunity to lead successful independent lives... And finally, we remain committed to reducing the tax burden and in particular the impact of marginal tax rates on lower and middle income earners, when we have the room to do so. More>>

ALSO:

JustSpeak Report: Bail Changes To Blame For New Billion Dollar Prison

In 2013 criminal justice spending was falling and the Government was mulling over what to spend the money on. 3 years later there are 10,000 people in prison and a new billion dollar prison is announced. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news