Russell DeborahNATURAL HAZARDS INSURANCE BILLThird ReadingHon Dr DEBORAH RUSSELL (Minister responsible for the Earthquake Commission): I present a legislative statement on the Natural Hazards Insurance Bill. ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon Dr DEBORAH RUSSELL: I move That the Natural Hazards Insurance Bill be now read a third time. I would like to start by acknowledging the devastation inflicted upon significant parts of the North Island by Cyclone Gabrielle—in particular parts of Northland Hawke's Bay and Tai Rāwhiti—as well as the Auckland Anniversary floods. We've all seen the heartbreaking images of homes destroyed families displaced and lives lost but we've also seen communities band together and first responders working around the clock to keep people safe and in many cases save lives. That has certainly been the experience in my own electorate where the Titirangi Volunteer Fire Brigade put in endless hours getting water to people and where communities in Pīhā and Karekare have worked together to save lives and to respond to the cyclone events. New Zealand has some of the highest natural disaster costs in the world as a proportion of GDP. Our natural hazards insurance scheme has successfully supported New Zealand's resilience and recovery through two of its most significant natural disasters in recent times. The scheme directly contributed to the recovery of the community rebuilding their homes to recover from the 2016 Kaikōura earthquake and the tragic 2010-11 Canterbury earthquake sequence and the scheme at that time directly contributed over $11 billion to the region's recovery. It's clear that in the days weeks months and years to come the scheme will also be critical to supporting the recovery of areas affected by Cyclone Gabrielle and the Auckland floods. However the natural hazards insurance scheme also contributes in other ways. For example the commission is responsible for research and education intended to both understand and reduce the potential impact of future disasters. The first-loss cover provided by the scheme also contributes to the provision of affordable private residential property insurance. With over 90 percent of New Zealand properties insured against natural disaster our levels of residential insurance are high compared to other countries facing a similar exposure. So with this in mind I welcome the cross-party support that this bill has received and thank the members for their thoughtful comments during the first and second readings. The natural hazards insurance scheme has served New Zealand well. For this reason the bill retains most aspects of the current cover provided. The targeted changes in this bill will modernise the Earthquake Commission Act. It will do so by enabling better community recovery following a natural disaster updating and improving the clarity and certainty of the role of the commission and the cover it provides and supporting the future durability and flexibility of the Act. The bill has benefited significantly from lessons learnt following the tragic 2010-11 Canterbury earthquake sequence and the valuable recommendations provided to this Government by Dame Silvia Cartwright as part of the inquiry into the Earthquake Commission (EQC). The current EQC legislation needed review. The Act did not adequately describe how cover should respond to the sort of damage that may actually arise in an event of the size and complexity of the Canterbury quakes. The earthquakes have for ever left their mark on the Canterbury region and its residents but the commission's staff management and systems were also tested and stretched. Outdated legislation contributed to the delays experienced by the people of Canterbury. However the commission has also undertaken significant work to apply operational lessons from Canterbury. Role clarity and preparedness for future events were key themes coming out of the inquiry. The commission has already invested heavily in new systems and processes to prepare for future events. These changes will place the claimant at the centre of its response to future natural hazards so while the bill does retain most aspects of cover some important changes have been made to improve or to clarify the cover provided. The residential building cap has been increased from $150000 to $300000 per dwelling excluding GST. Homeowners will still receive the same total insurance payout but the contribution from the Natural Hazards Commission will reduce premiums in high-risk areas. Cover for retaining walls has been improved by replacing cover for indemnity value—that's the current value of a property—with an undepreciated value that is subject to a $50000 financial cap again excluding GST and changes have been made to the cover provided to mixed-use buildings to improve consistency between the rules and the amount of cover provided. Dr David Clark's second reading speech discussed a number of other changes to definitions exclusions or time periods. While technical in nature I anticipate that these changes will clarify cover and reduce future dispute. The bill was the subject of extensive scrutiny by the Finance and Expenditure Committee. I would like to thank the members of that committee for their diligent work on the bill which included site visits within Canterbury. I would like especially to acknowledge the leadership and key contribution of Barbara Edmonds and other members who chaired that committee throughout this process and I'd also like to thank all the officials who worked so hard on the processing of the bill. Finally I would like to thank the previous Minister responsible for the Earthquake Commission Dr David Clark—thank you David—who has contributed many hours to the development of this bill and has steered it to this point. This bill modernises the key piece of legislation supporting New Zealand's future resilience to natural disaster. I commend this bill to the House. ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.