Insurers seek more time on NZ natural hazards bill reforms

23 May 2022

Insurers have called for more time to introduce changes that will be needed under proposed legislation to reform the Earthquake Commission (EQC).

The Natural Hazards Insurance Bill, being reviewed by the Finance and Expenditure Select Committee, takes into account lessons learned since the Canterbury Earthquakes and incorporates a number of recommendations from a public inquiry. It is currently expected to begin from December 1 next year.

The Insurance Council of New Zealand (ICNZ) says the legislation has been long in the making but the proposed start date doesn’t give insurers enough time to make necessary changes.

“For the Government to now seek to rush implementation in order to bring this legislation into force within a year, rather than giving insurers at least 18 months required for sensible implementation, would create risks in the delivery of this change and pose an undue burden on insurers that would increase costs and reduce the ability to focus on meeting their customers’ needs,” ICNZ says in a submission.

IAG says insurers will have to review and update policy wordings, update internal systems and processes and renegotiate aspects of the National Disaster Risk Agreement. Changes to retaining wall cover are an example of a seemingly minor amendment that will have a big impact “on the ground”, it says in a submission also seeking a time extension.

The insurer says complaints and dispute management aspects of the bill need to be improved and it’s not clear how they would fit with a proposed New Zealand Claims Resolution Service.

“The provisions in the Bill are unnecessarily complicated, don’t integrate with existing or proposed solutions and won’t address the key issues in many complaints,” it says.

EQC’s name will change to Toka tū Ake – Natural Hazards Commission as part of the changes, which the Government says clarify land damage regulations, make rules for mixed use buildings clearer and simplify the excesses and calculations for retaining walls, bridges and culverts. It also introduces a claimant code and a standing dispute resolution service.