Woods Megan; Williams PotoEARTHQUAKE COMMISSION AMENDMENT BILLFirst ReadingHon Dr MEGAN WOODS (Minister for Greater Christchurch Regeneration): I move That the Earthquake Commission Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.Following several destructive earthquakes between 1929 and 1942 the first Labour Government made the decision to set up a statutory scheme of disaster insurance resulting in the Earthquake and War Damage Act of 1944. Over time cover was extended to other natural disasters and to cover damage to land as well as buildings. The need to offer this extension to the cover was identified by the report that followed the 1979 Abbotsford landslip in Dunedin where 69 homes were lost. For decades New Zealanders have felt reassured by the fact that we have a public system of insurance cover in times of disaster. In 1993 the Earthquake Commission Act brought together these two earlier editions and introduced new changes to the system. The insurance became known as the Earthquake Commission (EQC) cover. It was limited to residential buildings and war damage cover was removed from the Act. The changes that we are seeking with this piece of legislation are the first substantial changes that have been introduced since that Act was introduced in the early 1990s and I would like to acknowledge the previous Minister Gerry Brownlee who is in the House today who began a review of the Earthquake Commission legislation following the sequence of events in Canterbury. In 2012 this work was begun and this is the first time we have been able to bring changes to this House. I am bringing a very limited set of changes that were part of that review to this House. I am bringing the changes that make common sense and were widely agreed upon in the submissions and the consultation that came out of the 2012 review into EQC functions. Together I think the four substantial changes that we are bringing in will mean claims can be handled better and faster in the event of another major natural disaster. They are changes that can be introduced now ahead of the independent inquiry into EQC that this Government has indicated it wants to carry out. This Government has indicated that what we have been through in the Canterbury earthquake sequence and then the Kaikōura earthquakes is something that we must consider. We must learn the lessons from that and we must make appropriate legislative changes and that is something that we are committed to doing. Upon becoming Minister one of the first questions I asked officials in regard to EQC was: what are the changes that we could implement from the 2012 review that just make sense and that will make life better for claimants if the worst happens and we have another event before we conclude the review and are able to implement these changes? The changes that we are seeing in the legislation that is before this House now are a result of that. There are four amendments to the Earthquake Commission Act of 1993. The proposed amendments deal with substantive issues that as I said can usefully be put into place before we proceed with the findings of the independent inquiry. The four amendments are to remove EQC cover for personal property or home contents cover; to increase the EQC building cap cover from $100000 to $150000 plus GST; to lengthen EQC's pay notification time limit; and to clarify EQC's authority to share and publish information including to facilitate settlement of EQC and private insurer claims. I think one of the things we have learnt from the Canterbury earthquake sequence is that the flow of information is vitally important. It is also vitally important that there may be required to be the sharing of information for safety reasons. As I said the EQC Act has operated with few changes since 1994 to provide capped mandatory natural disaster insurance cover for insured residential buildings contents and associated residential land. EQC cover helps to ensure affordable private insurance cover for residential owners against specified hazards. This helps support high overall levels of home insurance in New Zealand and one of the things I think we can be grateful for over the seismic years that we have experienced in this country in recent times is the very high levels of insurance that we do possess in this country. The experience of implementing the EQC Act for almost 25 years and during this recent series of large-scale events has highlighted a need to update and improve the EQC scheme design and operational requirements. The EQC legislative review which included public consultation in 2015 identified several substantive issues with current EQC Act provisions and a large number of other potentially desirable technical refinements. Preparations for the statutory inquiry into EQC and its claims management process are progressing. Full-scale reform of the Earthquake Commission Act would not be appropriate until this inquiry is complete and we can learn the lessons of that inquiry.However focused high-priority self-contained amendments can be usefully progressed before the inquiry findings are reported. The proposed amendments retain the overall legislative scheme while substantially improving the operation of the EQC Act by simplifying and speeding up claims handling and resolving issues with the EQC Act that have previously been identified by both the Ombudsman and the Canterbury Earthquakes Royal Commission.Therefore this bill provides the four amendments that I have mentioned. I'm going to go into some more detail on them in my remaining time. Firstly the removal of EQC insurance cover for personal property or home contents as it's more popularly known—maintaining this cover reduces EQC's ability to cope with major disasters by tying up the scarce organisational resources which contributes to delays in resolving high-priority residential building and land damage claims. Consultations with insurers suggest that private insurers are willing to take this cover on.The second major change that is happening is increasing that cap on residential buildings from $100000 to $150000 plus GST. What we know from both the Canterbury and Kaikōura earthquakes sequences is there is a large number of claims that sat in that body between $100000 and $150000 that could have more easily been resolved with just recourse to EQC and not having to do the interaction between the private insurer and the public insurer. Obviously this requires EQC carrying more of the risk in the increase in cover but this will also require the private insurers to cover less of those so there should be a cost neutral switch there.The third change that we are making is enabling EQC to accept claim notifications for up to two years after a natural disaster. This was a recommendation of the Ombudsman. There are a variety of reasons of why people may not have got claims in in the specified three-month limit. The Ombudsman pointed to people with disability issues such as people with sight impediments that may not have noticed damage in that period so giving the ability to stretch that time period out longer makes for a much simpler application of the Act. It could also in an event such as the Canterbury earthquakes sequence where we had several claimable events allow people to take the time to properly assess the damage as it can be attributed to each separate event rather than having to do the attributions that were done across events which complicated many of the claims.Lastly the last change that is being made is clarifying EQC's authority to share information to support effective implementation of the Act and settlement of insurance. The changes to the Act will allow the release of information it holds for the following purposes: preventing or lessening a threat to public health or public safety or to the life or health of any individual. It would allow it for the administration of the Act or the performance of the Earthquake Commission and its function facilitating preparedness—ASSISTANT SPEAKER (Poto Williams): I apologise to the honourable Minister.