Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

KPMG: the time is right for EQC Reform

KPMG: the time is right for EQC Reform


The time is right to revisit the role of the Earthquake Commission (EQC), says KPMG New Zealand.

KPMG’s General Insurance Update 2015 publication, released today, includes two articles that focus on the future role of the EQC, in light of the Government’s plans to amend the Earthquake Commission Act 1993 early next year.

KPMG’s Head of Insurance, Kay Baldock, says while the Canterbury earthquakes have demonstrated the value of having a Natural Disaster Scheme – they have also highlighted a real need to revisit the role of the Earthquake Commission (EQC).

“It’s critical that we define the extent of the EQC’s role – how far it will or should support recovery following a natural disaster. Many of the problems experienced after the Canterbury earthquakes were due to the fact that the EQC’s existing operating model was not fit-for-purpose. It simply did not contemplate a natural disaster the scale of the Canterbury events.”

The Insurance Council of New Zealand (ICNZ) has made submissions to the recent Treasury review of the EQC Act. The ICNZ proposes that private insurers would effectively become claims managers for the EQC’s first loss exposure. KPMG agrees with that view.

“Under that model, the insurance company would have primary responsibility for managing claims and recovering amounts due from the EQC,” says Kay Baldock.

“The Canterbury earthquakes have shown that insurance companies are better-equipped with the in-house expertise to manage large, complex events.”

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

In another article written for the KPMG General Insurance Update 2015, ICNZ Chief Executive, Tim Grafton, says the new legislation should require claims to be assessed by insurers rather than the EQC.

“The ICNZ also advocates for all under cap as well as over cap claims to be managed by insurers, to the point of settlement or reinstatement. This change in the claims process would remove duplication of costs, provide one point of contact for home-owners, and ensure a faster recovery process.”

The article also outlines the other submissions made by the ICNZ in response to Treasury’s discussion paper.

Despite the shortcomings of the EQC’s current operational model, both KPMG and ICNZ agree the wider value of the EQC scheme is “unquestionable”. Taking a combined view of the Canterbury earthquakes, insurance coverage was around 71%. This is in stark contrast to coverage of the 2011 Japan earthquake at 19%, or the Californian earthquake of 1994 at 35%.

“The Canterbury earthquake experience has shown that New Zealand is very fortunate to have such a comprehensive natural disaster support structure,” says Tim Grafton.

“However, the EQC Act was not designed with such a major catastrophe in mind. The review of the Act provides an opportunity for the shortcomings to be put right.”

ENDS

© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines


Gordon Campbell: On The US Opposition To Mortgage Interest Deductibility For Landlords


Should landlords be able to deduct the interest on the loans they take out to bankroll their property speculation? The US Senate Budget Committee and Bloomberg News don't think this is a good idea, for reasons set out below. Regardless, our coalition government has been burning through a ton of political capital by giving landlords a huge $2.9 billion tax break via interest deductibility, while still preaching the need for austerity to the disabled, and to everyone else...
More


 
 

Government: Concerns Conveyed To China Over Cyber Activity
Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government. “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity... More

ALSO:


Government: GDP Decline Reinforces Government’s Fiscal Plan

Declining GDP for the December quarter reinforces the importance of restoring fiscal discipline to public spending and driving more economic growth, Finance Minister Nicola Willis says... More

ALSO:


Government: Humanitarian Support For Gaza & West Bank

Winston Peters has announced NZ is providing a further $5M to respond to the extreme humanitarian need in Gaza and the West Bank. “The impact of the Israel-Hamas conflict on civilians is absolutely appalling," he said... More


Government: New High Court Judge Appointed

Judith Collins has announced the appointment of Wellington Barrister Jason Scott McHerron as a High Court Judge. Justice McHerron graduated from the University of Otago with a BA in English Literature in 1994 and an LLB in 1996... More

 
 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

InfoPages News Channels


 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.