Clark David; O'Connor GregNATURAL HAZARDS INSURANCE BILLSecond ReadingHon Dr DAVID CLARK (Minister responsible for the Earthquake Commission): I present a legislative statement on the Natural Hazards Insurance Bill. DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon Dr DAVID CLARK: I move That the Natural Hazards Insurance Bill be now read a second time. This bill replaces the Earthquake Commission Act 1993. The past few years have reminded us how important access to affordable and available disaster insurance is. The Earthquake Commission (EQC) scheme has helped contribute to very high rates of household disaster insurance and it is vital that this continues. The scheme also needs to meet or exceed community expectations regarding the fair and professional treatment of its claimants and contribute to wider Government policy and priorities in natural hazard risk management. The Natural Hazards Insurance Bill builds on the important lessons that we've learnt over the last decade. It modernises and streamlines the current Earthquake Commission Act and incorporates many of the recommendations of Dame Silvia Cartwright's public inquiry into the Earthquake Commission. Members across parties recognise the importance of this bill and what it will mean for communities that might have to wrestle with recovery from natural disasters. At first reading the bill received cross-party support for referral to select committee. The Finance and Expenditure Committee have now considered the bill and reported back to the House with recommended changes that strengthen and clarify the bill's provisions. The committee's report recommends unanimously that the bill be passed. The committee also recommends all amendments unanimously except for one in clause 2 regarding commencement which is recommended by majority. I acknowledge the valuable and important contribution that members on that select committee have made to the bill's progress in the House. I also want to acknowledge submitters.Before I outline the key points raised in submissions and how the bill responds to those I want to be clear about what the bill does and does not do. The bill is intended to respond to the recommendations of Dame Silvia's public inquiry into the Earthquake Commission and to clarify and modernise the current Earthquake Commission Act. It retains all the core features that help make the current scheme a success—capped coverage of residential buildings and associated land through a levy-based system attached to private insurance policies. It also clarifies the commission's objectives functions and obligations to claimants. It's not intended to lead or implement policy on the Government's role in managing climate change costs and risks. Now while Toka Tū Ake EQC does and will continue to provide cover for damage caused by hazards that will be exacerbated by climate change it is premature for the bill to attempt to address those issues now. Similarly it's not intended to give the commission advocacy regulatory or veto powers over where houses are built or not built. These are questions best left to other parts of central and local government. However the bill is intended to make it clear that the commission has an important role in research and education and in supporting other agencies through sharing information on risks and exposures. The committee received 26 submissions from organisations and individuals. That's resulted in a large number of technical amendments and some substantive ones. I wish to say a few things to the substantive ones that have come back from the select committee. Firstly commencement: the bill as introduced would commence on the latter of 1 December 2023 or 12 months after Royal assent. Now insurers made submissions that this time line was not achievable for them and sought commencement somewhere between 18 months and three years after Royal assent. I think the committee struck a good balance of extending the 1 December 2023 date to 1 July 2024. If the bill is passed this year as I hope the practical effect will be to provide insurers something over 18 months to prepare for the new Act commencing from 1 July 2024. The majority of the committee also recommended retaining the alternative leg of the commencement provision namely 12 months after Royal assent as this provision would only start to apply if Royal assent occurred after 1 July next year and the near final bill is already in the public domain. I consider the 12-month alternative commencement provision to be appropriate. We want this bill to commence as soon as is reasonably possible so its benefits are available to homeowners affected by a natural disaster but no one who knows how far off that next large event may be. The reported-back bill also makes a range of amendments intended to improve claimant outcomes by providing certainty and predictability of cover and by supporting fair and timely management of claims. Now these include further clarifying what's a dwelling covered by the scheme including clarifying the status of homes used for short-term accommodation homes that are temporarily unsuitable for living in while they are under renovation and large-scale residential accommodation like university hostels. It also amongst the amendments is clarifying how potential imminent damage covered by the scheme is determined. There is quite a list but I think it's important to put them on record: extending requirements for the commission to consult interested parties in the development of the Code of Insured Persons' Rights; removing a provision carried over from the existing Act that gave Toka Tū Ake EQC the option of charging an extra amount to continue cover following a claim; introducing a new provision regarding the commission's recovery of amounts paid to claimants in error including specifying some circumstances in which the commission cannot seek repayment of amounts; and requiring the commission to consult with claimants before exercising salvage rights to land or exercising its discretion to buy a damaged land site from a claimant. The bill also clarifies that claimants whose claims are settled on a diminution of value basis cannot be subsequently penalised for failing to carry out a repair as diminution of value settlement is predicated on repair being unfeasible unlawful or disproportionately expensive.Lastly the bill now requires the commission to settle claims as soon as is practicable rather than within one year of determining the amount to be paid. I think the House will be able to see that the committee has done a good deal of work to further clarify the intention of Dame Silvia's report. So as we go through these changes I do want to again thank the select committee for its work. The bill also makes it clear that external animal housing like dog kennels clothes lines and outdoor cooking facilities like pizza ovens are not covered by the scheme. Restoring these structures is beyond the Government's interest in restoring the essential parts of a residential building. These changes build on key features of the bill as introduced and are intended to improve claimant outcomes and provide claimants certainty with what is covered by their insurance where their statutory rights and expectations can lie and how their claims dispute or conduct complaint will be addressed. The committee also introduced additional procedural safeguards that apply if the commission exercises its powers of entry to a home or marae where the occupier's consent has not been obtained. While this is a useful modernisation of the provision in the existing Act this provision is expected I think to see very little use. Lastly a provision enabling commencement of the bill to be deferred by Order in Council has been deleted and the power to amend certain dollar amounts in the Act by regulation has been limited so that regulations can only increase the dollar amount above what has been legislated by the House. Thank you again to the committee and the officials for their work and thank you to the members of the public who provided submissions. It gives me very real pleasure to commend the Natural Hazards Insurance Bill to the House and I thank parties across this Parliament for their constructive approach to the bill. Thank you Madam Speaker.