The Insurance Council of New Zealand (ICNZ) says it is clear legislation must be changed to avoid “ad-hoc responses being foisted” on the Earthquake Commission (EQC) which it is not equipped to carry out.

A full review of New Zealand’s EQC Act is set to be undertaken next year, and ICNZ wants an “all-of-government” plan to be established to respond to future natural catastrophes.

Today the Government released findings from a public inquiry into the EQC which are the culmination of a year of community engagement and make a raft of recommendations, drawing on 972 written submissions and feedback from public forums held across the country.

EQC Chairman Michael Cullen acknowledges the report “makes some serious criticisms” of the commission’s handling of the Canterbury earthquakes a decade ago, which he says “too often added to the trauma felt by the residents of greater Christchurch”.

ICNZ CEO Tim Grafton says the EQC Act itself must be changed. Customers should have a “single point of accountability and responsibility” for the management of their claim, which “ultimately should be the insurer they chose”.

Inquiry Chair Dame Silvia Cartwright says private insurers still have “considerable scepticism” about the EQC’s ability to provide a more integrated approach to managing claims.

“An adversarial environment of continuing litigation (or suggestions of this) between private insurers and EQC…adds to the complexity of the relationships.”

The state-owned EQC has already apologised for “compounding the stress of customers” affected by the devastating 2010/11 earthquakes. It admits it was slow to adapt and respond to changing circumstances and was not easy to deal with.

Mr Cullen said today the insurance industry, Government and EQC will need to work co-operatively and with a clear recognition of each other’s roles and responsibilities toward “a system where New Zealanders have a single point of contact, likely to be with their private insurer, who will handle all of that New Zealander’s claims from start to finish, with EQC reimbursing the costs to the insurer for which EQC is responsible”.

“Too many of the definitions in the Act are unclear and this, and subsequent attempts to interpret these definitions created very significant issues, not least between EQC and the private insurance sector, some of which are still unresolved,” Mr Cullen said.

“It is to be hoped that a comprehensive definition of the roles of various bodies in the event of a disaster of this magnitude will avoid this kind of error.”

The recommendations say greater clarity of EQC’s role is “urgently required,” and calls for a clear mandate and mechanism for its post-disaster operations.

The report says EQC could be the co-ordinating body for the residential insurance response following any future major natural disaster, but “it would need the authority to do so and its powers and role would need to be specified”.

The 240-page report is available here.