Woods fast-tracks agreed EQC legislative changes

Article – BusinessDesk

March 20 (BusinessDesk) – Earthquake Commission Minister Megan Woods has fast-tracked four widely supported changes to the law governing the EQC, including a higher cap for residential property and ditching the entity’s contents cover, leaving more contested …Woods fast-tracks agreed EQC legislative changes, leaving thornier questions to inquiry

By Paul McBeth

March 20 (BusinessDesk) – Earthquake Commission Minister Megan Woods has fast-tracked four widely supported changes to the law governing the EQC, including a higher cap for residential property and ditching the entity’s contents cover, leaving more contested issues to an upcoming inquiry.

The government expects to pass legislation before the end of the year changing the EQC to lift the cap limit to $150,000, let the agency accept claim notifications for up to two years from a natural disaster, drop contents cover, and clarify EQC’s information sharing, Woods said in a statement. Those changes are expected to come into effect from July 1 next year.

“These are widely agreed, common sense changes that can be made before the independent inquiry into EQC,” Woods said. “I’ve asked for them to be brought forward so that, if the worst did happen and we had a major event shortly, these changes will have been made.”

Woods tasked an independent ministerial adviser to speed up EQC’s Canterbury claims, with the report expected to provide advice on operational changes needed to resolve residual claims in a manner which ensures timeliness, cost effectiveness and high professional standards.

The terms of reference allow for recommendations on how to improve claims management; operational, resourcing, policy or legislative constraints faced by EQC; any issues caused by the entity’s processes that hold up timely resolutions; ongoing monitoring of the quake claims; and any other related matter.

“These are changes that can be made now without having to wait for the outcome of the upcoming inquiry,” she said.

Today’s changes adopt two of the high-level reforms flagged by the previous administration, being the increased cap and removal of contents insurance. The former government had also planned to clarify that EQC land was for natural disaster damage directly affecting an insured residence or access to it, standardise claims excess on EQC building cover at $1,000, and require EQC claimants to lodge claims with private insurers who will act as the contact point. Those will now be addressed in the inquiry.

In 2015, the former government released nine proposals in a discussion document, with the preferred package including plans for private insurers to largely manage claims, building cover including site work to remove an overlap between land and building cover, doubling the cap on building cover to $200,000 while land cover would apply only where rebuilding is not possible. It also proposed lifting standard building claims excess to $2,000 and dropping EQC’s contents coverage.

The review, led by the Treasury, was launched in September 2012 to consider the Crown’s disaster contingency fund’s future after its resources were exhausted by the Canterbury quakes that caused billions of dollars of damage and killed 185 people.

The government of the day got a hurry-up on the review in 2015, putting out the discussion document five months after global reinsurers publicly grumbled that the delays were making it difficult for them to operate in an uncertain environment.

(BusinessDesk)
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