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 Drone Strikes And Judith Collins‘ Last Stand

The news that a New Zealand citizen was killed last November in a US drone attack in Yemen brings the drones controversy closer to home.

To the US, drones are a legitimate response to the threat posed by the al Qaeda organisation and its franchisees... To the US, the drones carry the added advantage of not putting US troops at risk on the ground, and minimises the need for putting them in large numbers in bases in the countries concerned, always a politically sensitive point.

The counter-argument, well articulated by security analyst Paul Buchanan on RNZ this morning, is that this particular drone attack can be said to amount to an extra-judicial execution of a New Zealand citizen by one of our military allies, in circumstances where the person concerned posed no threat to New Zealand’s domestic security. More>>

 

Parliament Today:

Policies: Labour’s Economic Upgrade For Manufacturing

Labour Leader David Cunliffe has today announced his Economic Upgrade for the manufacturing sector – a plan that will create better jobs and higher wages. More>>

ALSO:

Gordon Campbell: On The Life And ACC Work Of Sir Owen Woodhouse

With the death of Sir Owen Woodhouse, the founding father of the Accident Compensation Scheme, New Zealand has lost one of the titans of its post-war social policy. More>>

ALSO:

Bad Transnationals: Rio Tinto Wins 2013 Roger Award

It won the 2011 Roger Award and was runner up in 2012, 2009 and 08. One 2013 nomination said simply and in its entirety: “Blackmailing country”... More>>

ALSO:

Select Committees: Tobacco Plain Packaging Hearings

The Stroke Foundation is today backing the Cancer Society and Smokefree Coalition who are making oral submissions to the Health Select Committee in support of proposed legislation to remove of all branding from tobacco products. More>>

ALSO:

Milk: Oravida Asked For Cabinet Help

New evidence released by New Zealand First today reveals Justice Minister Judith Collins used her position to manipulate the Government to help her husband’s company, Oravida, after the Fonterra botulism scare, says New Zealand First Leader Rt Hon Winston Peters. More>>

ALSO:

With Conditions: Ruataniwha Consents Approved In Draft Decision

The Tukituki Catchment Proposal Board of Inquiry has granted 17 resource consents relating to the $265 million Ruataniwha Water Storage Scheme in a draft decision that would open more of the Hawke’s Bay to irrigation. More>>

ALSO:

Fast Lanes, Campervans: Labour 'Making The Holidays Easier For Kiwi Drivers'

The next Labour Government will make the holidays easier and journeys quicker for Kiwi families driving on the roads, says Labour Leader David Cunliffe. More>>

ALSO:

Gordon Campbell: On Royalty And Its Tourism Spin-Offs

Ultimately the Queen’s longevity has been one of her most significant accomplishments. A transition to Prince Charles while the monarchy was in the pits of public esteem in the mid to late 1990s would have been disastrous for the Royal Firm. Far more congenial representatives have now emerged... More>>

ALSO:

Privacy (Again): ACC Demands Excessive Privacy Waivers

Labour: “This is just another example of ACC under National deliberately acting to deny treatment and compensation... Those who did fill in the form have effectively been victims of yet another ACC privacy breach. This time Judith Collins knew it was happening..." More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news