The NZ Earthquake Commission (EQC) has refuted media reports that damage from this latest aftershock will drain its funds.

Although not wanting to contradict comments by NZ Prime Minister John Key that the fund is severely depleted, EQC CEO Ian Simpson says it’s unlikely the fund will run completely dry.

“The only way that will happen is if we go through the top of our reinsurance, and in my view that is unlikely at this stage,” he told insuranceNEWS.com.au.

Mr Simpson says that prior to the September earthquake the fund had $NZ6 billion ($4.4 billion) plus $NZ2.5 billion ($1.8 billion) of cover under its reinsurance program.

Added to this are purchases of $NZ1.5 billion ($1.1 billion) in deductible cover, bringing the pool up to $NZ4 billion ($2.9 billion).

The losses from the September earthquake amount to about $NZ3.5 billion ($2.5 billion) and when the EQC’s reinsurance cover kicks in it will leave about $NZ3 billion ($2.2 billion) in the fund.

Mr Simpson says the commission reinstated another layer of reinsurance cover following the numerous aftershocks caused by the September 4 quake.

Although at this stage last week’s event is being treated as an aftershock, he says it will be considered two separate events.