Earthquake Commission Amendment Bill

on behalf of the Minister responsible for the Earthquake Commission: I move, That the Earthquake Commission Amendment Bill be now read a second time.

I’m proud that New Zealand, despite our high level of risk, has amongst the highest, if not the highest, rate of residential insurance in the world. The Earthquake Commission Act contributes to this by providing affordable insurance against natural disasters. The series of natural disasters across New Zealand in the last eight years has emphasised the importance of insuring property against such events. Many households with damaged property have been able to repair their houses and move on with their lives only because they were insured. The Canterbury earthquake sequence has been one of the world’s costliest natural disasters, and the Kaikōura earthquake added additional strain on the system. The $6.1 billion in the Natural Disaster Fund in September 2010 has been all but depleted with the Earthquake Commission (EQC) recently needing to call on the Crown guarantee for the first time since its inception in 1944.

As the natural disaster insurance system, including EQC, has been put under considerable strain in the last years, we’ve learnt that the system isn’t perfect. This Earthquake Commission Amendment Bill proposes a set of changes to the Earthquake Commission Act. The changes are common sense and can be made before we undertake a full review of the Act.

I would like to acknowledge the previous Minister, the Hon Gerry Brownlee, who in 2012 began a review of the Earthquake Commission legislation. I’d also like to thank members of the Finance and Expenditure Committee, officials, and submitters for their contributions and work on the reported-back bill.

The changes we’re seeking to make are the first substantial changes to be introduced since the current Act was introduced in the early 1990s. The public inquiry into the Earthquake Commission, which will commence shortly, is the first step in a fuller review of the Act. Learning from the experiences of the people of Canterbury, the biggest test of the Act in its 74-year history will identify further areas for improvement. I anticipate that a further, more substantive EQC amendment bill will be developed following the Earthquake Commission inquiry.

This bill, as reported back from select committee, proposes four amendments to the Earthquake Commission Act 1993. These amendments will increase the cap for EQC building cover to $150,000 from $100,000 currently, both plus GST; secondly, remove EQC cover for personal property and home contents; thirdly, lengthen EQC claim notification time limits; and, fourthly, clarify EQC’s authority to share and publish information, including to facilitate the settlement of EQC and private insurer claims. The proposed amendments will improve the operation of the EQC Act by simplifying the speeding up of claims handling while retaining the overall scheme. It also resolves issues with the EQC Act previously identified by the Ombudsman and the Canterbury Earthquakes Royal Commission.

Increasing the cap—the changes proposed will increase the monetary cap on EQC residential building cover to $150,000, plus GST. Despite rising building costs, the cap hasn’t been adjusted from the current level of $100,000, plus GST, since the EQC Act came into force in 1994.

On the removal of content cover—EQC insurance cover for personal property being removed will free up scarce organisational resources, increasing EQC’s ability to cope with major disasters to houses themselves—homes. Diverting resources to claims from personal property contributed to delays in resolving higher-priority residential building and damage claims. I understand that private insurers are willing to take this cover on.

Terms of the claim notification period—these changes enable EQC to accept claim notifications for up to two years after a natural disaster, rather than the current inflexible three-month time limit. EQC will be able to accept notifications between three months and two years from the date of damage if EQC is satisfied that the insured person’s failure to make a claim within the three-month time limit has not materially prejudiced EQC’s ability to assess the claim. The bill as reported back with the support of the majority of the committee proposes that the bill provide for regulations to be made to either extend the two-year deadline or, alternatively, EQC can consider accepting claims in exceptional circumstances more than two years after the damage-causing event. Some members have expressed concern about the impact of this proposal on EQC and insurers’ reinsurance contracts. This specific proposal affects EQC claim deadlines, not insurer claim deadlines, so I’m advised it should not affect reinsurance for insurers. EQC’s discussions with its insurers indicate that the changed claims deadline is not expected to have any significant impact on EQC’s reinsurance contracts.

On information sharing, changes clarify EQC’s authority to share information. These changes will support effective implementation of the EQC Act and settlement of insurance claims. Specifically, EQC may release information that it holds for the following purposes: to prevent or lessen a threat to public health or public safety or to the life or health of any individual; for the administration of the EQC Act or the performance by EQC of its functions; to facilitate natural disaster preparedness, response, or recovery, including the settlement of insurance claims by insurance companies; and, lastly, by making property-related information publicly available. In response to concerns expressed by the Office of the Privacy Commissioner in submission to the select committee, the drafting of the information-sharing provisions has changed significantly between the bill as introduced and the bill reported back now. The bill also requires EQC to have appropriate protections in place to maintain the confidentiality of personal information. These information-sharing provisions also address recommendation 94 of the Canterbury Earthquakes Royal Commission.

When will these changes take effect? That’s covered by the bill. The bill proposes that the changes to contents and building cover will apply to insurance contracts entered into from 1 July 2019. Insurers have been consulted on and support this implementation and the associated transitional provision. This will enable both insurance companies and those who seek insurance to protect their interests with alternative arrangements in respect of their contents. The changes to claim lodgment deadlines and information provisions are proposed to take effect from enactment. On behalf of the Minister, I commend this bill to the House.

Thank you, Madam Deputy Speaker. It is a pleasure to speak to the Earthquake Commission Amendment Bill. It was a good process that we went through in the Finance and Expenditure Committee.

As the Minister said, we have a very high penetration rate of insurance in the New Zealand market. That is largely due—particularly for residential property—to the Earthquake Commission (EQC), and that is for a very good reason. So you could be forgiven for thinking that there is cross-subsidisation by having a flat rate for EQC, which is actually true. It’s called flat pricing, or it can be a community rating that it can be referred to as. High-risk buildings and buildings in high-risk areas pay the same rate as low-risk buildings and buildings in low-risk areas, and that’s for a very good reason. If we don’t have that system in place, then we won’t have the level of penetration in the market which, inevitably, when we have an event—say, a Christchurch event—will lead to the Crown having to step in to ensure that the city gets back on its feet in a very timely manner. So the Earthquake Commission was brought in for very good reasons, and it works really well. However, it does need to be updated, and this amendment bill is very timely.

National will be supporting the bill, as you might well have guessed by now, but there are a couple of caveats that I would like to point out as we go through. Removing the contents cover and extending the residential building cover to $150,000, perhaps counterintuitively, actually lowers the exposure to EQC in a Wellington-type event, and that is because in an earthquake a lot of buildings suffer from minor damage right through to catastrophic damage, whereas in a tsunami or volcanic event, buildings tend to be destroyed and not so many suffer only minor damage. By removing that contents cover and increasing the cap to $150,000 plus GST, it is a much better situation for those people who suffer damage, but, as I said, it is, counterintuitively, a little less exposure for EQC.

Getting that number right is about balancing where you shift the risk from the insurance companies to the EQC, or the other way around, and if we don’t get that balance right—if it’s too much risk on EQC—then that’s bad for everybody in New Zealand. If we put it all on the insurance companies, that raises the price of insurance, making it unapproachable for many people, who won’t get involved. So I think $150,000, when we looked at it in the select committee, was the right number. There were a number of people who submitted who wanted it to be at $200,000. However, that, I believe, would not have been the right number. It would have put too much risk on EQC and taken it off the insurance companies. I think that the balance that we struck was right.

With regard to extending the claims limit—the period in which you can make a claim—it was 30 days, and it was extended to three months during the Canterbury earthquakes. This bill will extend it to two years. We had reservations about that and the submitters at the select committee also had significant reservations about that, and I think for very good reasons. I think that what will have to go with this is a very good campaign to ensure that people realise they are really putting themselves at risk if they don’t make a claim in a timely manner. There is the materially prejudiced caveat for the insurance companies—for EQC, at least—and there’s also the issue with their own insurance companies. If a claimant leaves their claim for a significant amount of time, it can be quite difficult to ascertain what damage was caused by an earthquake and which particular earthquake, and where the liabilities lie, and that would be quite dangerous ground for a claimant to go down.

Also, I think, in most insurance contracts, an insured person, if it’s their dwelling, and if they vacate that dwelling for more than 60 days—well, it varies, but in most cases it’s 60 days—without informing their insurance company, their insurance is, in fact, not valid. So the insurance company may not accept the claim. If they’re a landlord, they usually have to visit and inspect their property every 90 days. So this two-year period doesn’t actually line up with industry practice, and I think it is a bit dangerous, going down that track. I understand totally the reason why we might want to do it—we all feel sorry for people who fall outside that—but we look at what happened in Kaikōura; where 99 percent of claims were all lodged before the three-month date. So it’s a very small number that would be affected. However, it’s not good when it is, and I accept that.

What isn’t in the bill which I think I would like to highlight is that in the Kaikōura event, we had a memorandum of understanding (MOU) between the Earthquake Commission and insurance companies that wished to sign up to it, where the claims were made to an insurance company which was then a claim to EQC. Currently, as the law stands, a claimant goes to EQC and makes a claim, EQC assesses the claim, and if it’s over the cap, they then have to go and join the queue and talk to their insurance company. It’s a really silly process and it’s slow, and it slows everything down. In Kaikōura, that was all worked around with the memorandum of understanding. It was recommended to be in the bill—a lot of submitters came to the select committee saying it should be in the bill. However, as the Minister alluded to, it will be, apparently, put in a later bill. However, natural disasters don’t wait for bureaucratic processes, and I argue that it should be in this bill, and I’m drafting an amendment to put it in there. I think it’s really important that it be in there for everybody’s sake.

Also, having insurance companies run the process and manage it is a much more efficient system, where they actually have a far greater standing army than EQC does. So when a large event happens, the insurance companies have all the processes in place to ramp up their effort to get around and assess those claims. But, of course, at the same time when that happens, if we don’t have that ability, insurance companies are going to be competing with EQC for the same resources. Insurance companies are far better placed to do this, and I would argue that we should have that in this bill. There’s no reason to delay it. It’s not that hard. All of the reasons that EQC put up against it were, basically, around audit and accountability processes. But insurance companies are not insurers on their own; they also take reinsurance, so they have audit and accountability processes. Reinsurance companies from Switzerland or the UK, where, often, they’re based, have very strict processes on their insurance assessments. They are randomly audited and all of the paperwork is gone through, because those reinsurers don’t want to pay up what they don’t have to, either. It’s exactly the same as it would be for EQC, so I think that’s absolutely a silly argument because it’s all covered, and it was covered in the MOU. I know there were lots of random audits on those processes, as there should be. Everyone should have those good processes in place to ensure that we all have confidence in the system.

So, as I said, I’ll be putting that amendment forward in the committee stage, but we do support the bill with those caveats, and I commend it to the House.

Thank you, Madam Deputy Speaker. It’s again a pleasure to get up and speak on behalf of New Zealand First in support of the Earthquake Commission Amendment Bill, and a thoroughly sensible piece of legislation and amendment it is. Of course, we’re amending the Earthquake Commission Act of 1993, but the genesis of this Act goes back to the old Earthquake and War Damage Act of 1944. Every time I consider this piece of legislation, I think of those far-sighted legislators back in the 1940s who put in these provisions to protect our economy from major shocks—excuse the pun with the quakes—and to futureproof our insurance systems. It was just those far-sighted provisions that saw us have $6.1 billion in the bank when the Christchurch earthquake struck—the first of them—on 4 September 2010. But, of course, as we heard from Minister Parker before, we’ve just recently had to trigger the Government guarantee. I think we were down to about $240 million - odd in the kitty after a series of quakes—obviously the Christchurch ones, but then, more latterly, the Kaikōura sequence.

I think the bill has been relatively well traversed. It’s quite a simple bill. This is, in fact, the low-hanging fruit. Of course, there is a wider review under way, and there will be a more root and branch overhaul of this Act, but this is the low-hanging fruit. There are just these four sensible changes. Of course, the raising of the cap to $150,000, up from $100,000—that cap was set in 1994, and property prices, obviously, have gone up considerably since then. But there is, as the previous speaker Mr Stuart Smith alluded to, some moral hazard in this. We require people to be insuring themselves, so we don’t want to set the threshold too high, where individuals consider that they do not have to take responsibility for their own actions. So I think that we’ve got that—the Finance and Expenditure Committee have come back reinforcing that $150,000 limit.

The removal of the cover for contents is, once again, thoroughly sensible. The complexity of that—trawling through people’s vases and televisions and microwaves—just clutters the whole process and also probably does open itself up for a little bit of fraud too. Of course, being a Cantabrian, I know that Cantabrians wouldn’t have indulged in that sort of behaviour, but it may be possible to occur in other places. I think removing that $20,000 cap for contents is a sensible measure. Of course, there has been quite a lot of deflation with household items, too, over the ensuing years. The claims notification period from three months to two years—I think that again just takes some of the pressure off getting the claims in, and I do note there is provision under exceptional circumstances to extend that again beyond the two years, so that is again pretty sound thinking, I think.

The information-sharing provisions: now, there were 470,000 claims in the Christchurch sequence and 38,000 in the Kaikōura sequence. So the volume of claims and anything we can do to simplify that process and the sharing of information—I did actually note in my first reading speech that I thought that was the area that the select committee would have to look at hardest. I note that the Privacy Commissioner made some reasonably significant recommendations to the select committee that have been picked up on in part. There are provisions like that public health has to be under threat, or public safety. It does allow property-related information to become publicly available, but it does also have some safeguards to protect individual privacy. So once again I think the Privacy Commissioner will have been a very useful contributor to that select committee process and, no doubt, his views carried some weight.

I note the implementation of the bill from 1 July 2019, and I think that can’t come too soon. The run of misfortune we’ve had with these significant natural disasters means that the low-hanging fruit that these amendments represent needs to come in sooner rather than later. So I think that’s also a thoroughly sensible course of action. So, without further ado, I will commend this bill at the second reading stage to the House on behalf of New Zealand First. Thank you.

Thank you Madam Deputy Speaker. I too have pleasure in supporting this bill in the second reading, the Earthquake Commission Amendment Bill.

I’d like to kick off by acknowledging all the work that the Earthquake Commission (EQC) have done in the past since the Christchurch earthquakes. The last speaker mentioned 470,000 claims—a huge amount of work, a huge amount of resource that had to go into the process of dealing with these claims, and, as noted previously, many of these claims were claims regarding contents. As we’ve heard, this amendment bill will exclude contents from the EQC’s liability, if you like, or obligation. That burden will fall on the private sector, and the residents will pay their premiums through the private sector with regard to their contents. That’s OK. That’s a good thing. It makes the EQC focus on what it’s good at. If we look at the number of buildings, the number of claims for buildings, as I understand it, was 167,000. So we can see a huge number of those claims were regarding contents, which will no longer be the case.

We’ve also touched on the cap increasing from $100,000 to $150,000 plus GST, and that has not been adjusted since 1993-94, but, looking at the CPI index as I was coming in this afternoon, the real number should really be around $160,000 if you allow for inflation. So it hasn’t really changed. The number hasn’t really risen, and I wonder whether the Finance and Expenditure Committee gave some thought to the fact that inflation will continue and the number $150,000 will continue to be eroded in real terms. So we’ve seen no real increase in the cap, but we have seen a decrease in the obligations that the EQC has to the public of New Zealand vis-à-vis the removal of contents. I just thought I’d point that out.

The other change has been the time for claiming increasing from 30 days up to two years, and even beyond in certain circumstances. But, as has been noted, that flexibility is there to give flexibility for people in unusual circumstances. As has already been noted, most people—99 percent of people, I think, was mentioned—claim within the three months, and for good reason: for certainty to enable their claim to be real, to be justified, and to be credible to the insurer. So while most will continue to claim within that 30 days to three months, let’s say, it is a good thing that that period of time has been given to allow for some flexibility. I take on board what the Minister has said, that that uncertainty really makes very little, if any, difference to the reinsurance market—the cost of reinsuring these claims that might be over, say, three months.

So it is a very good bill because it enables the processes that the EQC is obliged to participate in to be much more efficient and effective, and to be much leaner and meaner, if you like, and much less of a burden on the taxpayer and the administration of the EQC. For that reason, I commend it to the House.

Thank you, Madam Deputy Speaker. It was a real pleasure to sit on the Finance and Expenditure Committee, which considered this bill. It was good for a number of reasons, but, most importantly, so that we could get the Earthquake Commission in shape for the future, because its performance historically in respect of the Canterbury earthquakes left something to be desired.

It is important to note that that $150,000, as the member who just spoke observed, won’t do what originally the Earthquake and War Damages Commission was intended to do, which was to replace, more or less, an entire average house. Really, it is just a first level, a first layer of insurance. But it has gone up significantly, and that is important because what we found in the Canterbury earthquakes was that by far and away the vast majority of houses, in fact, were dealt with entirely by the Earthquake Commission, and increasing that amount by 50 percent will be proportionately another significant number, meaning that people won’t have to deal with their private insurers.

Can I just say that I think the greatest improvement in this bill at the select committee was the extension of time for claims. Now, it is quite correct to say that 99 percent of claims are made within three months, and obviously there’s a real incentive to do that, but it was a real concern in the committee that there would be people who didn’t make a claim for very valid reasons. Perhaps they were not particularly able, didn’t realise that their house had been damaged, or didn’t see the magnitude of the matter. Or perhaps they were ill or in hospital or even overseas. Conceivably, they could even have died between the time of the earthquake and the time for making a claim, and the matter was left to their estate. So all of those kinds of situations are really quite valid reasons where the claim might not have been made. To have that hard cut-off was really quite inappropriate. So it was very, very good to see a little bit of indulgence—

💬 Hon David Parker: Didn’t know they needed more than one claim for more than one earthquake.

Minister Parker makes a very good point that in multiple events they may not have realised they had to put multiple claims in. So it is for all of those kinds of situations.

What this bill actually does is make this much more aligned with the insurance industry, which in fact has no particular limit on the making of claims. They can only bar a claim when the insurer can point to prejudice in that delay.

There are some other important points in there. In terms of information disclosure, the Privacy Commissioner was extremely helpful. It is absolutely appropriate for the Earthquake Commission to gather data on things like land quality or how foundations respond in earthquakes, but they need to do so in a way which is entirely consistent with the privacy principles whilst at the same time pursuing one of their objectives under the Act, which is to ensure preparedness for earthquakes.

This is a bill which, to my mind, was greatly improved at the select committee. It is an amendment bill. If I could say one small thing about the contents matter, contents, in fact, are easily insured by private insurers. They were covered for $20,000, which is not a catastrophic loss for most people. So, once again, there’s a tidy-up to streamline the process, to make claims resolution much quicker.

So look, the next event that comes once this bill has passed into law will be managed more quickly, more fairly, and more effectively, and the Earthquake Commission will be much better placed to be a great insurer of first resort into the future. I utterly commend this bill to the House.

Thank you, Madam Deputy Speaker. It gives me a great deal of pleasure to speak to the Earthquake Commission Amendment Bill in its second reading. I, unfortunately, didn’t get the opportunity to participate in the select committee process, but none the less I’ll have an opinion, as I usually do. Interestingly, I live in a house that had the chimneys bowled off it in 1931 by the Napier earthquake. They didn’t learn, because it got bowled again in 1942 by the Wairarapa earthquake—

💬 Dr Duncan Webb: How old were you then?

—can’t believe that, can you—and not a cent of that was covered by the Earthquake Commission, because it wasn’t there. None the less, the Earthquake Commission is one of those gems that we have in New Zealand—and I guess ACC is another example of a gem that we have in New Zealand—that is hugely valuable to our society and to our community.

One of the interesting things about the Earthquake Commission is that if it wasn’t here, we’d probably find it extremely difficult to get private insurance for earthquakes—we’d find it extremely difficult to get private insurance for a lot of things, probably—because it gives the insurance companies the certainty that they require to participate in our market, and anyone who tries to insure anything other than a house in Wellington will have found in recent times that that’s not that simple. I guess—as I pointed out in the debate on the last bill—it could become more and more difficult to collect the money that’s required to run these things if we were to run it on an insurance-rated base because, as I stated earlier, more and more people are not insuring. More and more people are finding it difficult to get insurance, and so, eventually, we might not get the cover we require to ensure that these bits of legislation are covered and that things like the Earthquake Commission are covered by these things in the future. I don’t think that’s an issue at the moment, but it may well become one in the future.

I think lifting the cap is eminently sensible. I think removing the cover for contents is also sensible, and it probably should never have been in place.

Also, Stuart Smith made some really interesting points, which I tend to agree with, and I think that at some stage in the future, that will inevitably be considered in the course of this bill. As I said earlier also, I spent a lot of my life involved in the insurance industry and have looked at a lot of these things from an insurance company perspective, not necessarily from a Government or a public perspective. I think that his point he made around the point that insurance companies may well be better to administer this thing from start to finish was sensible. I also think that they are in a much better position to manage this. They have the infrastructure and the people in place to do it, and I think the first Christchurch earthquake most certainly proved that in most cases, they were better equipped to deal with these issues than the Earthquake Commission was. So I like the ideas that Stuart Smith raised in the course of his speech—I think they do have a lot of merit.

We do, of course, live in one of the most fragile parts of the world from the perspective of events, whether they are storms or earthquakes. You could well call it the Shaky Isles. As Dr Seuss once said, “Today was good. Today was fun. Tomorrow is another one.”, and they come pretty quick in New Zealand, so things change from day to day and change very rapidly. So I do think this is a good start, to bring this piece of legislation up to speed, and I certainly support that. But, as I said, I do think there’s the opportunity for us to review these things further, and no doubt it will—like a lot of other things we have to do in this country—be reviewed pretty frequently, because we do seem to have these events. Of course, it was only last week that this place shook a fair bit, and so they come pretty quickly.

So I’ve got a great deal of pleasure in commending this bill to the House. I look forward to the debate on Stuart Smith’s proposal in the committee of the whole House stage, and we’ll see how it goes. Thank you, Madam Deputy Speaker.

Thank you, Madam Deputy Speaker. I’m pleased to have a brief call on the Earthquake Commission Amendment Bill. The previous speaker, Ian McKelvie, referred to future inquiries. Well, of course, Minister Parker noted that the Minister responsible for this bill, the Hon Megan Woods—there is a further major inquiry into the Earthquake Commission (EQC) planned, and there will doubtless be quite significant changes to the principal legislation as a result of that. But, in the meantime, this bill is typical of the work that the Minister, the Hon Megan Woods, is doing. It’s a very good bill. It’s a common-sense bill.

It’s good to see that National is supporting it, because, of course, two of the changes that are in the bill in terms of both the increased cap and the removal of EQC insurance cover for contents were part of the recommendations that came out of the review in 2015 and were flagged by the previous Government. The removal of the requirement for EQC cover for contents is a good measure to ensure that claims are dealt with more speedily after natural disasters, because of the huge number of claims that came in after the Canterbury quakes that related to contents, and, of course, it recognises that while the loss of belongings and damage to those is extraordinarily stressful, it is a lot less than the loss and damage to homes. So that makes sense. The increase in the cap on residential building cover from $100,000 to $150,000, plus GST—that also makes sense because it hasn’t changed since the Act came into force.

One of the other major changes was enabling a much longer limit for the lodging of claims, and it was really pleasing to see the work that was done by the Finance and Expenditure Committee here, because the bill as introduced provided for that limit to be extended up to two years, but the select committee proposed that there be an ability for Government to pass regulations to allow EQC to accept claims beyond that two-year limit if the damage couldn’t reasonably have been discovered within the time or if there was absence, incapability, or other disability. It also allows the ability for Government to pass regulations that in exceptional circumstances, EQC could also accept claims longer than two years. Of course, the claims still do have to be lodged as soon as practicable, but it was something that the Ombudsman had said several times—that the limit for lodging claims should be extended.

Again, in the area of information sharing, the changes in the bill here are to assist the EQC in sharing information to reduce the risk to public health or public safety. Again, the select committee adopted some useful changes as a result of the submissions. There were only a small number of submissions on the bill—some 16, and I think only about nine of those went to a hearing. But, again, it showed the benefits of the work of the select committee, ably chaired by Parliamentary Under-Secretary Michael Wood. The new framework in the bill for requesting information from EQC and encouraging EQC to share claim-related information will encourage more proactive release by the commission.

So it’s a small bill but it is a good bill, and it presages further work that will come out of a much wider review of the legislation and recommendations there. So I commend the bill to the House.

Thank you very much, Madam Deputy Speaker. I’m really pleased to speak in the second reading of the Earthquake Commission Amendment Bill. I’m pleased because the legislation does need to be amended. Having fit for purpose legislation in a country like New Zealand, which is so earthquake-prone, is actually essential.

The work that underpins these amendments began back in 2012 to 2015 under the previous Government. At that stage, it was a response to the Canterbury earthquakes. There was developed a discussion document to update the 1993 legislation to update it in light of our experience, which was considerable. That discussion document was a significant piece of work. It covered nine quite broad areas, and, unfortunately, this bill only covers four of them. So the most complex, the most difficult, and the most challenging areas haven’t been dealt with.

The legislation does need to be updated urgently. It needs to be modernised and it needs to be streamlined because it is absolutely essential that the Earthquake Commission (EQC) can respond as effectively as possible to support New Zealanders in case of an earthquake but also under other natural disaster conditions. So this bill covers the most obvious, the most straightforward, and the simplest issues—in other words, the low-hanging fruit. That’s useful, but, unfortunately, it doesn’t do the job properly.

I, like anybody else who’s lived through a significant earthquake sequence, was reminded for the need for this legislation last week when we had our little shake in the House. The Earthquake Commission is a unique organisation. It’s a really Kiwi organisation, begun in response to the Napier earthquakes, and it’s served New Zealand well over the years. I’m very aware that it needs to continue to provide that service, and do it better if possible. So I think we’re duty-bound to as quickly and as effectively as possible incorporate all the learnings from the Canterbury earthquakes. It’s interesting, because in Canterbury over the past few years, we’ve learnt to love to hate EQC, and I say that it’s because—it is only because—of the Earthquake Commission that New Zealanders are so highly insured.

Pretty close to 100 percent of New Zealanders are insured, and that’s generally because the banks won’t give you a mortgage unless you’ve got insurance, but that is out of step with the rest of the countries around the Pacific Rim. When you look at places like Japan or the United States of America, it can be that their households—only about 15 percent of them are insured, and so I’m very grateful to the Earthquake Commission, particularly when we had significantly large meetings straight after the earthquakes, where people were very agitated about what was going to happen to their homes, and because virtually everybody was insured, the questions were things like “When is my house going to be fixed? How can it be fixed? How can it be repaired?” In contrast, in other countries, where perhaps 85 percent of the people aren’t insured, it would have been a totally different conversation.

So, getting back to the bill, the four amendments that are there are a step forward, but they don’t go far enough. The first, which is removing the EQC insurance cover for contents, is an absolute no-brainer. In times of a major disaster, the Earthquake Commission needs to be absolutely focused on the big picture—in other words, looking after people and their homes, and getting them fixed or repaired or rebuilt. The insurance industry’s perfectly capable of covering contents and personal effects, and I think this amendment will help streamline services and improve the effectiveness of EQC, so it’s the right thing to do.

Raising the limit of the EQC residential building cover cap is also a sensible thing to do. Presently, it’s $100,000, plus GST, but that was set way back in 1993. So, to increase it to $150,000, plus GST, is appropriate and the right thing to do.

One of the problems that we had during the Canterbury earthquakes was getting sufficient and accurate information about damage to settle claims as quickly and as effectively as possible, and so the amendments to this bill allow for more transparency in terms of sharing information to facilitate settlements and to inform disaster preparedness, response, and recovery. Basically, it will enable a much more proactive release of information for the public good.

The fourth issue, which is extending the time of claims from 30 days to three months and then, under regulation, to two years—and even longer under exceptional circumstances—at first glance, seems to be a pretty good thing to do for EQC customers, but there are significant issues around this that really haven’t been dealt with in this bill. One of the most difficult and challenging areas in the Canterbury experience was about reinstatement of cover after a seismic event. We had over 15,000 earthquakes, so some people had significant damage at several or more seismic events, and to get the accurate apportionment of damage costs in each event was a huge and difficult problem.

The apportionment of damage is absolutely fundamental to EQC and private insurance costs, and any extensions of the time frames for claims will have an impact on these responses and the dollars that are involved. So this is a significant area that needs to be looked in further amendments to the bill.

So, as I’ve said, National is pleased to support this amendment bill. It will improve the Act, but there is still an awful lot more work to do, and the most difficult issues need to be wrestled with because they haven’t been included here. So yes, we support the bill, but more work needs to be done. Thank you.

Thank you, Madam Deputy Speaker. I’m really pleased to rise and take a call on this, the Earthquake Commission Amendment Bill. I think it’s probably fair to say that the people of the South Island, particularly in the Christchurch area, have been—some of them especially—to hell and back in the last eight years at least, and I can only imagine, or begin to imagine, the stress that they have been under when making their claims for their earthquake damage.

As my colleague Duncan Webb said before, the amendments that are going to be made to this piece of legislation are going to ensure that—he says—when this happens again, it will enable these things to be acted on or managed more quickly. I really do pray that that doesn’t actually happen any time soon, but I think it’s really important that people will be able to know that their claims and worries will be able to be dealt with in a much more timely manner, given this piece of legislation. Obviously, there’s going to be a far larger review under way, but what these particular changes do is make some immediate amendments that will ensure that things can happen in a far quicker and more managed way, and I think that that is very important, particularly for people who have been through this issue before.

One thing I would like to talk about is removing the contents cover. Now, we know that your personal belongings are very personal, very precious, and very special, but I think the priority has to be around ensuring that there is the money available to fix people’s homes and dwellings, because people need those. They’re essential—we need to have homes and dwellings to live in. Our contents, although precious, can at some point be replaced.

I don’t want to hold up the House any longer. Everyone that has spoken before me has pretty much said all that needed to be said, so, without further ado, I wish to commend this bill to the House.

Thank you. It is my pleasure to stand and speak on the Earthquake Commission Amendment Bill, a bill that is a good first-steps type of bill. As my colleagues have already traversed quite a lot of the area that I wanted to talk on, I just want to acknowledge the people of Canterbury and the devastation that happened through the Canterbury earthquakes of 2010 and 2011, and also the people from Kaikōura. I think that, as I said, this is a really good first-steps bill. There are, as the Hon Nicky Wagner said, a few other areas that could have been included in this bill around the points—the hard parts around the role of the Earthquake Commission. I think they did a grand job, and this bill will actually help, hopefully, to improve the way that they deliver their services to the people of Aotearoa New Zealand.

I too, like the previous speakers, will be short with my delivery, with my contribution tonight, because I think that there are so many people out there who are waiting for this bill to receive its Royal assent, and I’m not going to stand in the way of that. So I’m very privileged and proud to commend it to the House. Thank you.

It’s been a long day—it’s 9.58 p.m.—and therefore I seek leave for the House to rise early.

Well, leave is sought; I’ll put the leave. Does anyone object to that? There is objection.

What a sad way to end what has otherwise been an incredibly positive debate on an issue that there’s clear agreement on. I want to say to the junior whip for the National Party that he’s part of the Canterbury team that understands not just why this is needed but why a much more comprehensive review of the operation and the scope of the Earthquake Commission is needed.

This is a great start. I’m delighted that it’s received such rigorous attention from the Finance and Expenditure Committee. It’s come back in very good shape. I was a bit disappointed that the Hon Nicky Wagner said it wasn’t going far enough, because we’ve had all those opportunities, but I certainly look forward to this legislation being well-supported and being implemented. It will be of great benefit to the people who need cover in the situations such as we’ve found ourselves in in Canterbury.

Thank you, Madam Deputy Speaker. I too tonight take a very short call on this Earthquake Commission Amendment Bill in its second reading. As has been traversed tonight, this bill is including some of the content of a discussion document that was actually released in 2015 and—

I’m very sorry to interrupt the member.

Debate interrupted.

The House adjourned at 10 p.m.