Smith StuartEARTHQUAKE COMMISSION AMENDMENT BILLIn CommitteePart 1 Amendments commencing on day after assent dateSTUART SMITH (National—Kaikōura): Thank you Madam Chair. I'll start out by saying that the National Party will actually be supporting this bill—with one very fine Supplementary Order Paper to go with that as well which will put this bill into shape and make it fit for purpose which it isn't at this stage.First of all in Part 1 is the collection of information which is a major part of this bill which is just to tidy up and make sure that the Earthquake Commission (EQC) is acting within the law and can collect information and share it so that the community gets a greater good out of that. That's right and proper. The National Party is certainly in full support of that.But clause 7 was one area that we did have quite a bit of concern about which is extending the period that a claim can be made. It goes into replacement clause 7(2) to schedule 3 where The notice under subclause (1)(a) must be given to the Commission—(a) not more than 3 months after the damage occurred (or any longer period prescribed by [the] regulations under [the] Act);". So under (b)—that is replacement subclause (2)(b)—"subject to subclause (2B) after the period set out in paragraph (a) has expired but not more than 2 years after … damage [had] occurred (or any longer period prescribed by the regulations [in] this Act)." you can put a claim in. In fact under regulation-making power the commission can make it as long as they need to make it however long that is.The concern we had and still have is that really insurance companies have a set period where if a house is abandoned or a property isn't being lived in or visited for 60 days and you haven't notified your insurance company some insurance companies put a significant excess in—one's a $10000 excess. Others just won't cover you in the event of an insurance event. So it's a sort of long-held tenet if you like that that would occur. The risk here with EQC is of course people might think they've got plenty of time to put in an insurance claim. How anyone could go two years without knowing that they had an insurance issue that they needed to deal with—an EQC issue—is beyond me.But there is of course a caveat in new clause 7(2B) if notice is given after the time limit expiring: "the Commission may decline the claim if [the lapse of time] before the notice was given materially prejudices the Commission's ability to assess the claim." And that is the risk here: that delaying a claim makes it very difficult for the assessors to pin down what earthquake—if you get a complex sequence of events like we had in Christchurch it's quite difficult to ascertain which one it is. Is it one event; is it two events; is it three events? And that can have quite a significant difference to the amount of money that could be claimed by a claimant and it also puts them in such a position that if there is damage over and above that their insurance company might not cover that either. I can't see how they would not know they'd had an insurance claim unless they were out of the country or completely incapacitated.But to put some numbers around it in the case of the Christchurch event 99 percent of the earthquake claims were in within a year; in the Kaikōura event it was 99 percent within 3 months and that was down to—which will be in the next part so I won't discuss it in too much detail now—the arrangement between insurance companies and EQC where a claimant could put in a claim and not go through the very inefficient process of making two claims: a claim going through EQC once it's determined to be above the cap then having to go to the back of the queue with the insurance company which makes an already stressful situation much more so.So the time limit is something that we had concerns about. In the end we decided to support it anyway—we were in a generous mood. It is a bit sloppy. I think it's got some real fish-hooks in it and I think it's incumbent upon EQC to get the message out there that you are putting yourself at great risk if you don't put your claim in within the prescribed period of three months."