Brownlee GerryHon GERRY BROWNLEE (National): As the two previous speakers from this side of the House have said we are supporting this bill but we do have one or two things that we'd like to make comment on as we progress through it.So the first point I'd make is that insurance per se is probably the best collision you'd ever see between a social outcome and a capitalist objective. It has served New Zealand pretty well up to this point and I hope it does so for some time to come. So while there will be and there are—and I'm very aware that there are—people who have had less than pleasant experiences there are also tens of thousands who have got through all of this process in a state that has at least returned them to where they were prior to the natural disaster that can never be totally mitigated by any Government. I've got a couple of concerns here and that is the bullish attitude that is starting to be developed by insurers. Now let me make it very clear that during the whole time of both the Canterbury and Kaikōura earthquakes there was good discussion good communication between the Government's agent the Earthquake Commission (EQC) which was subject to Government contribution through Treasury and the insurers. A number of common positions were reached in order that things could move forward and a lot of the 89 different—what's it called reinstatement? Let me say that again. A lot of the 89 different reinstatement insurance covers that were in place were in fact able to be categorised into smaller numbers in order to get a good result and always in the favour of the policyholder. Insurers chose to do that and work with the Government on that; that's good. But when I say that they're getting a little bit bullish I'm also aware of at least two claims. So I'm very aware of two claims here in Wellington that have resulted from weather activities both last year and this year where EQC has a cover and dealing with those claims is now contracted out to the private insurers. In neither case has the performance of the private insurers been in my view acceptable. Nor it would seem have the agents of those companies who are dealing with it had a proper understanding of the current Act and the obligations that it confers upon them. I think they've got into a mode where a lot of the information that might be available to claimants through the Official Information Act process because they were dealing with EQC is now remote from them because they're dealing with the private insurer. And I think that puts them in a worse position than would have been intended when the arrangements between EQC and the private insurers—for the private insurers to be the first assessors—were put in place. I'm happy at some point to discuss that with anybody who wants to take that any further. I'm also a little concerned by some of the statements that have been made publicly about this new change by people in the insurance industry. One chief executive made the comment that while this was a beautiful country we have a severity of natural disasters that present themselves as kind of a smorgasbord of which one you'd like according to where you live. I think that's all absolutely true. But he was suggesting that we move much more swiftly to risk-based pricing on almost a property by property basis. And there are elements of that included in this bill where we're looking at people perhaps in areas where there's considered to be lower risk ending up paying higher premiums than they do at the moment and those in other areas seeing some reduction. I think if we were to go to a totally risk-based pricing system we would be denying the social benefit that can come from the collective approach that's taken by EQC. Remember that the Government of New Zealand—in other words the taxpayers' representative body—has decided that it would be good to take the first $300000 worth of loss but the expenditure of that is essentially left in the hands of the private insurers. So I just think there is a natural tension there for virtually no property to go over cap—or to be a real you would say threshold; a very very high bar set on a threshold for going over the cap—because as soon as an insurer does that they are into their own retentions and expenditure and that bothers me a bit as well. It was interestingly one of the reasons that initially Treasury suggested not going to the higher cap levels when the first tranche of this reform was put in place a couple of years ago. Just so it's understood what I mean by that: if in fact the cap as it was at $100000 or is now at $150000—we know that in the current market it's pretty easy to get to $150000 and beyond that—it's the private insurer's responsibility to meet the obligations of the policy. If you go to $300000 it gives a lot more room for the people who are making the assessment to perhaps not make as good an assessment as they should have. And one of the ongoing problems that still exists out of Christchurch is the number of cases where first assessments were not as good as they probably should have been. That raises also the issue of: at what point does legislation in this country for this type of thing start to close off the opportunity for second third and fourth claims when there's been a sale of the property—perhaps two or three times? The Government opened up a thing called the as is where is" fund. It's still open and it seems to me that if someone has bought a property as is where is the person selling it has taken a cash sum not applied it to the repair of the property not transferred it in the sale—as they can choose not to do—then the person buying recognises they're buying something that is damaged and they will have to fix it. The idea that they simply then put their hand up saying "EQC come back and pay us again." I think is a little bit tough on the rest of the population who have reasonably contributed their payments for their insurance and should have some expectation that there'll be a degree of high diligence used in the application of it.So those are just a couple of points that I want to make. I hope the Minister is able to make some comment on it. I am particularly hot I've got to say on that performance from the private insurers who are now the guardians of EQC's reputation. And no matter what we want to say about what happened in Canterbury or Kaikōura or anywhere else where there's been a disaster and EQC have been involved it has served people well. There'll be others who'll want to contest that but the numbers speak for themselves. So to have that potential reputation in the hands of others who have a vested interest in protecting their own interests ahead of the State I think could well be a bit of a problem."