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

 


Vero CEO calls for significant changes to EQC Act

Vero CEO calls for significant changes to EQC Act

Vero Chief Executive Gary Dransfield says the EQC Act Review is a “once in a generation” opportunity to significantly improve the way natural disaster insurance is funded and managed in New Zealand.

Addressing the Trans-Tasman Business Circle at a lunch in Wellington today, Mr Dransfield said: “I believe it would be a lost opportunity if Government, insurers and others simply used the review to finesse existing legislation.

“For insurers, it should be the start of an ongoing reform process designed to deliver a resilient general insurance sector that underpins New Zealand’s economic competitiveness.

“For Government, it should be an opportunity to consider the best way to reduce the fiscal risk to the Crown for natural disasters, while providing an acceptable level of protection for public and private property.”

The latest Reserve Bank of New Zealand Financial Stability Report says expected total claims costs related to the Canterbury earthquakes may exceed $30 billion.

That would be more than 15% of the GDP of New Zealand. Fortunately, 80% of those costs are expected to be met by insurers and reinsurers.

“If the New Zealand Government had to borrow what reinsurers and insurers are paying out for the Canterbury recovery, the Government would have to find an additional $800 million a year in debt interest payments.”

Mr Dransfield said insurance had protected New Zealand from the full fiscal impact of the Canterbury earthquakes.

“The Canterbury earthquakes exposed weaknesses in the current EQC and private insurer hybrid insurance approach,” he said.

“The model is systemically flawed when placed under the stress of a massive volume of claims and no consistency in the terms and conditions of policies being managed by both the EQC and private insurers.

“Having a government insurer and private insurers responsible for claims from the same customer has made the Canterbury recovery extraordinarily complex and has reduced claims management speed and efficiency.

“Another major deficiency of the current approach is that it increases costs and wastes capital for both the Government and private insurers. Those additional costs are ultimately met by taxpayers and customers.”

Given the Government’s commitment to a balanced budget and debt reduction, Vero questioned whether it was sensible to operate a fully resourced and funded public insurance agency with the sole mandate of managing claims after a major natural hazard disaster.

Mr Dransfield concluded by saying that solid progress was being made and that prospects were bright for investment in Canterbury.

“That progress would have been faster and more substantial if not for the inefficiencies of the current earthquake insurance model. Pleasingly, we now have an opportunity to rectify those.”

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