A Government review of the Earthquake Commission will not examine the body's performance in the Canterbury earthquakes.
Treasury will lead the review of the Earthquake Commission Act 1993, it was announced today, which would ''draw on the lessons learned'' in the Canterbury quakes and other events in EQC's 20-year history.
That will include the extent of EQC cover and how much it costs.
Earthquake Recovery Minister Gerry Brownlee told reporters the Government hoped to find ways of improving the scheme or any obvious deficiencies learnt by the Christchurch experience.
"The starting point is that it has served us well and we are lucky to have had it. But clearly we've got to ask ourselves the question moving forward, how quickly to you replenish the disaster fund and what level of that might exist in the future. But I can assure you the cover will continue."
Brownlee said he didn't believe the basic model had to change.
"What we have to make sure is that it actually does or can meet the needs of people when those circumstances arise."
The review wouldn't affect current cover, he said.
"The Government stands behind EQC and it's quite capable of meeting future disasters. It's got reinsurance cover and it is a very sound organisation."
The review will focus on:
- What types of property the Earthquake Commission insures, including the structure and extent of EQC cover.
- How the Earthquake Commission prices its insurance.
- The institutional structure and design of the Earthquake Commission, including its roles.
- The financial management of the Crown's risk exposure and how it should be financed.
''[It] is also an opportunity to consider possible changes consistent with other government initiatives.''
Brownlee said the review would ensure the EQC supported the insurance industry, minimise Crown risk on private property damage and reduce ''the potential for property owners to experience socially-unacceptable distress'' in a natural disaster.
Finance Minister Bill English said the Canterbury earthquakes had been the commission's biggest test.
''In light of the lessons learned from the earthquakes, the Government will review disaster insurance arrangements to look at where changes to existing policy settings are desirable.
EQC has received more than 414,000 building claims and 93,000 land claims from the Canterbury earthquakes.
It has paid out more than $3.3 billion.
Its total bill is expected to be $12.2b.
Treasury will consult other agencies and consider homeowner feedback, and report back with proposed changes in March 2013.
- © Fairfax NZ News
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