Minister Megan Woods announces terms of reference for inquiry into Earthquake Commission

Demolition work on Defence House in Wellington, damaged in the 2016 Kaikoura earthquake. Photo / Mark Mitchell

The Government has announced the terms of reference for its public inquiry into the Earthquake Commission and appointed former governor-general and High Court judge Dame Silvia Cartwright to lead it.

"The aim of the inquiry is to learn from the experience of the Canterbury earthquakes and ensure that the Earthquake Commission is fit for purpose in future events," Minister for Christchurch Regeneration Megan Woods said today.

"The insurance system as a whole, including EQC's role in that system, needs to be ready to deliver services to those affected by the next big event, whenever or wherever that happens," Woods said in a statement.

A Royal Commission of Inquiry into the EQC was a manifesto promise for Labour before last year's general election.

Woods said today the inquiry would not consider past insurance settlements or current claims and would not comment on previous decisions made by the courts on insurance-related matters.

The focus of the inquiry was on the handling of insurance claims by EQC and, where appropriate, other insurers following the Canterbury quakes. There were other avenues for claimants to pursue individual cases, including the recently announced Greater Christchurch Claims Resolution Service.

"It's important to this Government that the people of Canterbury who have been through so much with EQC get the chance to have their say and that the whole country can learn from the experiences of the Canterbury earthquakes," Woods said.

Dame Silvia led the Cartwright Inquiry into Auckland National Women's Hospital in the 1980s, and served on the Cambodian War Crimes Tribunal.

"To have someone of her standing, skills and experience agree to lead this very important public inquiry is really exceptional," Woods said.

The inquiry, the first of its kind under the Public Inquiries Act 2013, will have all the powers of a royal commission, be independent of government and make its report directly to the Governor-General.

It will report back by the end of June, 2019.

The Insurance Council of New Zealand (ICNZ) said it was pleased the focus of the inquiry would be on lessons learned from the Canterbury earthquake experience and would consider other models such as that deployed after the Kaikōura earthquake.

Shortly after the Kaikōura earthquake in 2016, insurers and the EQC signed a memorandum of understanding under which insurers acted as agents of EQC, assessing and managing claims for their customers.

That was a significant departure from the model used in Canterbury in which claimants had to first lodge a claim with EQC, then EQC would need to seek validation that they were insured.

"The Kaikōura model has been incredibly effective," said ICNZ chief executive Tim Grafton.
"In two years, 99.8 per cent of all domestic claims and 99.2 per cent of total claims have been resolved."

"Under changes that come into effect in July next year, insurers will be responsible for managing and settling all contents claims," Grafton said.

If the insurer is going to be on the spot in any event, why would any model also require EQC be present too? This is the model for the future and we will be submitting such to the inquiry," he said.

National's EQC spokesman Stuart Smith said it was unlikely the inquiry would turn up any new information after probes by the Auditor-General, Ombudsman, and EQC's numerous select committee appearances.

"With the claim settlement process progressing much faster after the Kaikoura earthquake, we can see how important these changes were, and we know if another similar event was to occur, EQC is in a better position than it was," Smith said in a statement.