New Zealand insurers are likely to be disappointed after requesting significant changes to the operations of the Earthquake Commission (EQC).

Earthquake Recovery Minister Gerry Brownlee says there will be only minor changes to the legislation governing the state-owned insurer.

“We are not sure exactly what the minister means by minor,” Insurance Council of New Zealand CEO Tim Grafton told insuranceNEWS.com.au.

The Government supports the EQC model that enables high insurance penetration and which saw global reinsurers cover most insured losses following the Canterbury earthquakes.

“At that high level, things work, but there are clearly areas where we can do better,” Mr Grafton said.

Insurers have suggested raising the $NZ100,000 ($95,860) cap on damage covered by the EQC, after which insurers take on the claim.

There have been widespread complaints about assessments and disputes concerning the cap, plus issues with differing interpretations of reinstatement between the EQC and insurers.

“In the past 12 months members have experienced upwards of 2000 properties going over-cap, which insurers didn’t expect,” Mr Grafton said. “That is a reflection of the quality of assessment at the front end – when the builders arrive, they see it is not an under-cap job.”

Mr Grafton says insurers want clarity on land damage and consideration of area-wide declarations of land damage, instead of EQC compensation on a site-by-site basis.

The Treasury began a review of the EQC in 2012 and its recommendations are expected to be given to cabinet by the end of next month.

A public consultation is likely to follow, but this has not been confirmed.

See earlier story