Labour is proposing a sweeping overhaul of New Zealand's disaster insurance regime including shifting EQC levies from insurance premiums to rates bills, lifting the $100,000 cap on EQC payouts and putting in a new independent insurance commissioner whose first job would be to review the insurance industry and EQC's handling of the Canterbury quake aftermath.
"The Canterbury earthquakes have highlighted just how under-prepared both the industry and EQC were to handle a major disaster" Labour's Earthquake Commission (EQC) spokesman Clayton Cosgrove said.
"Being able to call on EQC's natural disaster fund has certainly lessened the cost of the rebuild for the rest of New Zealand. However the earthquakes also exposed some serious shortfalls, not the least the lengthy and stressful claims process faced by affected residents."
Labour's response would be to shift the current EQC levy which adds as much as $207 a year to household home and contents insurance premiums to the rates collected by local authorities.
That would mean all residential properties were covered.
"This will avoid the problem of uninsured properties not being eligible for EQC payouts", Mr Cosgrove said.
Labour would also introduce a greater degree of proportionality to the way EQC levies were calculated to make sure those with less expensive homes paid lower levies.
Mr Cosgrove also said the $100,000 cap on EQC payouts, above which private sector insurers pay out on quake claims, was "clearly outdated, and has added to the complexity of insurance payouts due to the high number of claims that have exceeded the cap".
Labour also wants to introduce an independent Insurance Commissioner, funded by a levy on insurers, who would take "a hands-on role in overseeing the industry and making sure it works better than it has when it is most needed".
"The Commissioner's first task will be to review and make follow-up recommendations on the actions of EQC and the insurance companies in the wake of the earthquakes."
Labour last month unveiled plans to set up a special earthquake court to speed up insurance claim disputes, a proposal Earthquake Recovery Minister Gerry Brownlee said was unnecessary due to the existence of a dedicated District Court bench for the hearing of quake related insurance claims.
Labour's quake package:
• Shift EQC levies from insurance premiums to rates bills
• Reduce levies for lower value homes
• Lift maximum EQC payouts on damage to homes from $100,000
• Establish a new independent Insurance Commissioner
• Establish a new earthquake court to hear disputes over insurance claims