Smith StuartSTUART SMITH (National—Kaikōura): Oh thank you Madam Speaker. It is a pleasure to speak on the Natural Hazards Insurance Bill.Actually on Monday 14 that was the sixth anniversary of the Kaikōura earthquake which was the genesis I guess of a lot of the changes in this bill. After the Christchurch or Canterbury earthquake sequence there were significant issues with people having to go through two steps. First of all they had to establish that their claim was outside of the $100000 cap from the Earthquake Commission (EQC) and often they took forever to get through that process. Then if it was above that cap that triggered a claim going to the insurance company where of course they were at the back of the queue there to go and get their claim processed—hugely stressful for people uncertain and a bureaucratic nightmare quite frankly.After that sequence and as a result of the Kaikōura earthquake the insurance companies and EQC came to an agreement amongst themselves where the insurance companies would process the claims: one claim only and you don't go back to the back of the queue if you didn't get through when you eventually got over the $100000 cap. That is in this piece of legislation. That is how it has worked its way through practical on-the-ground experience. That made a significant difference in the user interface with insurance companies and with EQC smoothing that process. And it's greater to have that in this bill formalised now rather than just being a side agreement effectively. So that is a magnificent part of this bill I think even though it hasn't really been touched on by anyone else as far as I'm aware in this debate.I think that one of the things that most of us on the Finance and Expenditure Committee spent a bit of time getting our heads around is the issue of landslips. When a landslip starts and when it ends can be quite important in the rules. I think we've done a pretty good job on that. It's the nature of these things I think that as demonstrated with the Canterbury and Kaikōura earthquake sequences these things are like a great battle plan—they're very good until the first shot is fired and then you find out where all the weak points are. I think there's been a really good job done on this bill but there will inevitably be issues that will come up in the future.The issue of volcanic events which we now extended an event from 48 hours to seven days—I think New Zealanders have forgotten about the risk of volcanic eruptions in New Zealand. The risk of a Hikurangi subduction zone rupture which is just sitting out off the coast over there behind you—that is quite high but it's an equal risk to volcanic eruption in Auckland. So that is something that Aucklanders seem to forget. They look quite smugly down at people in Wellington thinking they should have all the risk. Well actually there's quite a bit of risk up there not to mention Lake Taupō—I think the estimate is something like 3 metres of ash here in Wellington should that event happen. So there are massive risks in New Zealand.Look there's a lot of talk about climate change and I accept there's a climate change risk. But actually New Zealand's biggest risks are the catastrophic events that happen from earthquakes tsunamis and volcanic eruptions. There's no doubt that this will need to be updated again in the future.There are a lot of issues as I was mentioning around landslips before about retaining walls and it's been a lot of heartache. We heard evidence from people in the select committee about the ongoing nature of trying to fix their retaining walls and not actually having the ability to access their homes unless the retaining wall was fixed. We are now going to an undepreciated value with a limit of $50000 per dwelling for a retaining wall and $25000 per dwelling for bridges and culverts. That is something that comes up from time to time and will be a significant help anyway. Obviously in some cases that will not be enough but we can't cover every eventuality with these sorts of socialised funds.I note that the previous speaker Ingrid Leary mentioned that reinsurance could cover things outside the bill and I think one of the things we talked about in select committee was flood insurance and flooding and my concerns—in particular that we don't try and replicate the flood re example in the UK which ends up locking people into their flood-prone homes by having a social type insurance like EQC which is I think what some of the members on the other side have in mind: to extend the commission's cover to those sorts of events. I don't think that we should be going there. I think it would be far better that we got together with the insurance companies councils and central government and help where necessary to relocate those people away from that flood risk rather than locking them into their flood-prone homes which has been the case where these types of schemes have been introduced overseas.I think that the Privacy Act implications—we discussed quite a bit about that and we can understand why EQC would like to gather information from people affected in events and keep that information for future use as well as identifying all sorts of other learnings that could be helpful in the future. There are a lot of Privacy Act implications around that so we discussed that at length. I'm pretty comfortable that we landed in a good place.We extended the implementation of the bill. The insurance companies were very concerned about the amount of time it will take them to rejig their contracts. They needed time to get their systems in place I think. Well it's a bit of a compromise; it's not quite exactly where they wanted to be but we've got it in a fairly good position I think anyway.The disputes resolution—well by its very nature homes are most people's biggest and single investment. When they have an event when there's significant damage done they are thrown into a position often where they have to get into negotiations to get things—their insurance settled or EQC settled and then the construction done and reinstate their home if that's what's going to happen. It's a really stressful time for people and there are a massive number of disputes that come up—sometimes they're quite valid; sometimes they're not. But there's a lot at stake for people. The last thing we really want is to have people spending a lot of money and enriching the legal profession and really at no gain for the people involved.The change—up now to a $300000 EQC cover—doesn't come without implications. Those people living in low-risk areas are actually going to pay quite a lot more. There are more losers than there are winners in that change quite significantly so. So yes the costs for people for their earthquake cover which includes all losses in Wellington and other places like Marlborough where I live which are considered quite high risk—the costs of their insurance will go down but the vast majority of New Zealanders actually live in lower-risk areas and their cost of their insurance goes up quite significantly. So it's really an unfortunate thing but you have to make a judgment somewhere along the line. But I think it hasn't come out as has been sold by the other side of the House. On this side we realise that those costs are going to fall on people who are living in relatively low-risk areas. So with that I commend the bill to the House.