Mr SPEAKER: Question No 10, Dr Megan Woods.
Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible
for the Earthquake Commission: Is he confident EQC will be
employing the necessary resource to process and settle claims,
from both the Canterbury earthquake sequence
and the earthquake sequence of a fortnight ago,
after 16 December; if so, why?
Hon GERRY BROWNLEE (Minister responsible
for the Earthquake Commission): Yes; the Earthquake Commission (EQC)
is actively engaging with the private insurers and the Insurance Council of NZ
to come up with a more innovative way of dealing with things.
These are matters for EQC and its management, but I believe them
to be on the right track.
Dr Megan Woods: Is EQC currently pursuing a memorandum of understanding
with private insurance companies to undertake the inspection
and management of claims; if so, does he intend to sign off that memorandum?
Hon GERRY BROWNLEE: Well, for the question in the first part,
I can say that those discussions are, I believe, taking place.
The second part of the question asked me to put the cart
before the horse; I am not going to do that.
Dr Megan Woods: How does he expect homeowners to get a fair deal
on their earthquake claims when a private insurer has the power
to determine whether a claim is under cap or over cap;
is that not a blatant conflict of interest?
Hon GERRY BROWNLEE: Well, I am now really quite confused.
The member has spent the last however many years she has been
in this House criticising everything EQC does, and now
when we look to something that is slightly more innovative,
that is wrong too. We care about those people. We want them
to get a good deal, and that will be what they are delivered
through EQC and any arrangements they have.
Dr Megan Woods: What specific protections will be put in place
to protect claimants from the clear conflict of interest
of private insurance companies self-determining whether they have
any liability beyond the EQC cap?
Hon GERRY BROWNLEE: Mr Speaker, this answer may take a little longer
than would normally be the case. I need to take that time,
because, clearly, the member asking the question does not understand
the link between—
Mr SPEAKER: Order! We will just have the answer.
Hon GERRY BROWNLEE: —EQC and the private insurer. So here is the first bit.
In 1992 or thereabouts, the private insurance market decided that it was
no longer going to cover earthquake damage in NZ. As a consequence of that,
the Government went into negotiations with insurers at the time. The position
that was reached was that the Government, through EQC,
would supply cover for the first $100,000 worth of damage on a property,
plus GST. In addition, it would take the first $20,000 worth
of contents damage, plus GST, where the damage was caused
by an earthquake. For that, a premium was struck—
and is regularly struck—by the board of EQC, and charged
through the private insurer. No one has a direct relationship,
in an account sense, with EQC; they do with their private insurer,
but the obligation through the private insurer to its client
is through EQC. Anyone should be able to see that they are
intricately linked, and to suggest that there is some advantage to one
over the other is an utter nonsense because it would be easy for EQC
to discharge all of its responsibilities by simply
either paying cheques or turning them over to the private sector.
And, as the member knows, for the last 6 years in Christchurch,
getting to a point where people do get the right result has not been easy.
Those allegations she makes today—
Mr SPEAKER: Bring the answer to a conclusion.
Hon GERRY BROWNLEE: —are irresponsible, reckless, and show a total ignorance
of how the market works.
[MEMBERS APPLAUD]
[MEMBERS INTERJECT]
Dr Megan Woods: Given that he has now conceded the debacle
that Canterbury has been, will he offer a guarantee to every homeowner
lodging a new claim that they will get a fair deal and be dealt with
in a timely manner, or is he going to give them the run-around
like he has Cantabrians?
Hon GERRY BROWNLEE: Had that member taken a slightly—just slightly—
more positive attitude to the circumstances people find themselves in
in Canterbury, she may have got a better rating in the Trans Tasman MP stakes.
All I will say is this: the guarantee to people in Kaikōura is that they will get
what their policies entitle them to.
Mr SPEAKER: Question No 11.
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