10. Earthquake Recovery—Earthquake Commission and Private Insurance ClaimsDr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake CommissionEarthquake Recovery—Earthquake Commission and Private Insurance Claims10. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: Is he confident EQC will be employing the necessary resource to process and settle claims from both the Canterbury earthquake sequence and the earthquake sequence of a fortnight ago after 16 December; if so why?Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission): Yes; the Earthquake Commission (EQC) is actively engaging with the private insurers and the Insurance Council of New Zealand to come up with a more innovative way of dealing with things. These are matters for EQC and its management but I believe them to be on the right track.Dr Megan Woods: Is EQC currently pursuing a memorandum of understanding with private insurance companies to undertake the inspection and management of claims; if so does he intend to sign off that memorandum?Hon GERRY BROWNLEE: Well for the question in the first part I can say that those discussions are I believe taking place. The second part of the question asked me to put the cart before the horse; I am not going to do that.Dr Megan Woods: How does he expect homeowners to get a fair deal on their earthquake claims when a private insurer has the power to determine whether a claim is under cap or over cap; is that not a blatant conflict of interest?Hon GERRY BROWNLEE: Well I am now really quite confused. The member has spent the last however many years she has been in this House criticising everything EQC does and now when we look to something that is slightly more innovative that is wrong too. We care about those people. We want them to get a good deal and that will be what they are delivered through EQC and any arrangements they have.Dr Megan Woods: What specific protections will be put in place to protect claimants from the clear conflict of interest of private insurance companies self-determining whether they have any liability beyond the EQC cap?Hon GERRY BROWNLEE: Mr Speaker this answer may take a little longer than would normally be the case. I need to take that time because clearly the member asking the question does not understand the link between—Mr SPEAKER: Order! We will just have the answer.Hon GERRY BROWNLEE: —EQC and the private insurer. So here is the first bit. In 1992 or thereabouts the private insurance market decided that it was no longer going to cover earthquake damage in New Zealand. As a consequence of that the Government went into negotiations with insurers at the time. The position that was reached was that the Government through EQC would supply cover for the first $100000 worth of damage on a property plus GST. In addition it would take the first $20000 worth of contents damage plus GST where the damage was caused by an earthquake. For that a premium was struck—and is regularly struck—by the board of EQC and charged through the private insurer. No one has a direct relationship in an account sense with EQC; they do with their private insurer but the obligation through the private insurer to its client is through EQC. Anyone should be able to see that they are intricately linked and to suggest that there is some advantage to one over the other is an utter nonsense because it would be easy for EQC to discharge all of its responsibilities by simply either paying cheques or turning them over to the private sector. And as the member knows for the last 6 years in Christchurch getting to a point where people do get the right result has not been easy. Those allegations she makes today—Mr SPEAKER: Bring the answer to a conclusion.Hon GERRY BROWNLEE: —are irresponsible reckless and show a total ignorance of how the market works.Dr Megan Woods: Given that he has now conceded the debacle that Canterbury has been will he offer a guarantee to every homeowner lodging a new claim that they will get a fair deal and be dealt with in a timely manner or is he going to give them the run-around like he has Cantabrians?Hon GERRY BROWNLEE: Had that member taken a slightly—just slightly—more positive attitude to the circumstances people find themselves in in Canterbury she may have got a better rating in the Trans Tasman MP stakes. All I will say is this: the guarantee to people in Kaikōura is that they will get what their policies entitle them to.