Labour insurance policy 'mixed bag'

Last updated 16:49 09/07/2014

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The insurance industry has slammed a Labour Party policy to appoint an independent insurance commissioner to oversee the industry.

Labour's proposed Earthquake Commission (EQC) policy would increase the $100,000 payout cap and increase its financial obligations to affected property owners.

Labour's EQC spokesman Clayton Cosgrove said the Canterbury earthquakes had highlighted how unprepared the insurance industry and EQC were.

"An independent insurance commissioner, funded by a levy on insurers, will take a hands-on role in overseeing the industry and making sure it works better than it has when it is most needed," Cosgrove said.

The Insurance Council of New Zealand (ICNZ) has already dubbed the policy "a mixed bag".

It did not see the value in an independent commissioner, but welcomed an independent review of insurers dealing with earthquake-affected policy holders, confident they would pass muster.

It supported making the EQC levies collection part of local-body rates instead of including them in insurance charges and welcomed lifting the EQC payout cap.

Chief executive Tim Grafton said he rejected Labour's criticism of insurers.

"Yes, lessons have been learned but insurers have done extraordinarily well in progressing claims," he said.

Earthquake Recovery Minister Gerry Brownlee said Labour's policy showed it had been "caught napping", and had not noticed existing National Party policies.

The Government had already acknowledged the $100,000 EQC cap needed review and was already reviewing the Earthquake Commission Act, Brownlee said.

"This [policy] highlights [Labour's] lack of understanding of earthquake recovery issues and absence of new ideas for Christchurch," he said.

Both the ICNZ and Brownlee acknowledged changes to aspects of the EQC process needed to be made based on lessons learned in Canterbury.

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- The Press


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