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

AMA: Scoop's 'Invisible Paywall'

Operation Chrysalis: The Final Countdown - Thanks & There's Still Time To Pledge

Phew! We are now counting down the hours to the end of this crowd-funding campaign at 11pm on Sunday. Thankyou to all those Scoop readers and supporters who have pledged already. You have been awesome. But this is not over yet. More>>

 
 

PARLIAMENT TODAY:

IPCA Reports: Significant Problems In Police Custody

In releasing two reports today, the Independent Police Conduct Authority has highlighted a number of significant problems with the way in which Police deal with people who are detained in Police cells. More>>

ALSO:

Inspector-General of Intelligence and Security: Inquiry Into GCSB Pacific Allegations

The complaints follow recent public allegations about GCSB activities. The complaints, and these public allegations, raise wider questions regarding the collection, retention and sharing of communications data. More>>

ALSO:

TPPA Investment Leak: "NZ Surrender To US" On Corporates Suing Governments

Professor Jane Kelsey: ‘As anticipated, the deal gives foreign investors from the TPPA countries special rights, and the power to sue the government in private offshore tribunals for massive damages if new laws, or even court decisions, significantly affected their bottom line’. More>>

ALSO:

Werewolf: The Myth Of Steven Joyce

Gordon Campbell: The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country... More>>

ALSO:

RMTU: No Public Submissions On International Government Procurement Deal

“The government is preparing to assent to the Government Procurement Agreement, a World Trade Organisation Treaty which opens up New Zealand Government contracts to foreign companies and closes the door on local businesses and their workers. However the Foreign Affairs, Defence and Trade Select Committee is refusing to take public submissions on the decision.” More>>

ALSO:

Gordon Campbell:
On Pacific Spying

So New Zealand spied on its friends and allies in the Pacific – and has not only been passing on the results to the NSA, but has apparently passed on the details of the Pacific’s relations with Taiwan to our other best friends, the Chinese. On the side, the Key government has also been using the security services to gauge the chances of Trade Minister Tim Groser landing the top job at the WTO... More>>

ALSO:

State Housing Transfer: Salvation Army Opts Out

The Salvation Army has decided against negotiating with Government for the transfer of Housing New Zealand stock.
More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news