Parker DavidEARTHQUAKE COMMISSION AMENDMENT BILLSecond ReadingHon DAVID PARKER (Attorney-General) on behalf of the Minister responsible for the Earthquake Commission: I move That the Earthquake Commission Amendment Bill be now read a second time.I'm proud that New Zealand despite our high level of risk has amongst the highest if not the highest rate of residential insurance in the world. The Earthquake Commission Act contributes to this by providing affordable insurance against natural disasters. The series of natural disasters across New Zealand in the last eight years has emphasised the importance of insuring property against such events. Many households with damaged property have been able to repair their houses and move on with their lives only because they were insured. The Canterbury earthquake sequence has been one of the world's costliest natural disasters and the Kaikōura earthquake added additional strain on the system. The $6.1 billion in the Natural Disaster Fund in September 2010 has been all but depleted with the Earthquake Commission (EQC) recently needing to call on the Crown guarantee for the first time since its inception in 1944.As the natural disaster insurance system including EQC has been put under considerable strain in the last years we've learnt that the system isn't perfect. This Earthquake Commission Amendment Bill proposes a set of changes to the Earthquake Commission Act. The changes are common sense and can be made before we undertake a full review of the Act.I would like to acknowledge the previous Minister the Hon Gerry Brownlee who in 2012 began a review of the Earthquake Commission legislation. I'd also like to thank members of the Finance and Expenditure Committee officials and submitters for their contributions and work on the reported-back bill.The changes we're seeking to make are the first substantial changes to be introduced since the current Act was introduced in the early 1990s. The public inquiry into the Earthquake Commission which will commence shortly is the first step in a fuller review of the Act. Learning from the experiences of the people of Canterbury the biggest test of the Act in its 74-year history will identify further areas for improvement. I anticipate that a further more substantive EQC amendment bill will be developed following the Earthquake Commission inquiry.This bill as reported back from select committee proposes four amendments to the Earthquake Commission Act 1993. These amendments will increase the cap for EQC building cover to $150000 from $100000 currently both plus GST; secondly remove EQC cover for personal property and home contents; thirdly lengthen EQC claim notification time limits; and fourthly clarify EQC's authority to share and publish information including to facilitate the settlement of EQC and private insurer claims. The proposed amendments will improve the operation of the EQC Act by simplifying the speeding up of claims handling while retaining the overall scheme. It also resolves issues with the EQC Act previously identified by the Ombudsman and the Canterbury Earthquakes Royal Commission.Increasing the cap—the changes proposed will increase the monetary cap on EQC residential building cover to $150000 plus GST. Despite rising building costs the cap hasn't been adjusted from the current level of $100000 plus GST since the EQC Act came into force in 1994.On the removal of content cover—EQC insurance cover for personal property being removed will free up scarce organisational resources increasing EQC's ability to cope with major disasters to houses themselves—homes. Diverting resources to claims from personal property contributed to delays in resolving higher-priority residential building and damage claims. I understand that private insurers are willing to take this cover on.Terms of the claim notification period—these changes enable EQC to accept claim notifications for up to two years after a natural disaster rather than the current inflexible three-month time limit. EQC will be able to accept notifications between three months and two years from the date of damage if EQC is satisfied that the insured person's failure to make a claim within the three-month time limit has not materially prejudiced EQC's ability to assess the claim. The bill as reported back with the support of the majority of the committee proposes that the bill provide for regulations to be made to either extend the two-year deadline or alternatively EQC can consider accepting claims in exceptional circumstances more than two years after the damage-causing event. Some members have expressed concern about the impact of this proposal on EQC and insurers' reinsurance contracts. This specific proposal affects EQC claim deadlines not insurer claim deadlines so I'm advised it should not affect reinsurance for insurers. EQC's discussions with its insurers indicate that the changed claims deadline is not expected to have any significant impact on EQC's reinsurance contracts.On information sharing changes clarify EQC's authority to share information. These changes will support effective implementation of the EQC Act and settlement of insurance claims. Specifically EQC may release information that it holds for the following purposes: to prevent or lessen a threat to public health or public safety or to the life or health of any individual; for the administration of the EQC Act or the performance by EQC of its functions; to facilitate natural disaster preparedness response or recovery including the settlement of insurance claims by insurance companies; and lastly by making property-related information publicly available. In response to concerns expressed by the Office of the Privacy Commissioner in submission to the select committee the drafting of the information-sharing provisions has changed significantly between the bill as introduced and the bill reported back now. The bill also requires EQC to have appropriate protections in place to maintain the confidentiality of personal information. These information-sharing provisions also address recommendation 94 of the Canterbury Earthquakes Royal Commission.When will these changes take effect? That's covered by the bill. The bill proposes that the changes to contents and building cover will apply to insurance contracts entered into from 1 July 2019. Insurers have been consulted on and support this implementation and the associated transitional provision. This will enable both insurance companies and those who seek insurance to protect their interests with alternative arrangements in respect of their contents. The changes to claim lodgment deadlines and information provisions are proposed to take effect from enactment. On behalf of the Minister I commend this bill to the House.