The New Zealand Government has provided $NZ50 million ($46 million) to the Earthquake Commission (EQC) to continue covering catastrophes after the Canterbury and Kaikoura earthquakes depleted the state-owned insurer’s Natural Disaster Fund.

Minister Responsible for the EQC Megan Woods says up to $NZ100 million ($92.2 million) may be needed in the year to June, and a further $NZ170 million ($156.8 million) may be required the following financial year.

“It’s not yet possible to say with certainty what the total Crown funding requirements will be,” she said. “There are inherent uncertainties when estimating the outstanding claims liabilities from the Canterbury and Kaikoura earthquakes.”

It is the first time the Crown Guarantee has been used to fund the EQC since the arrangement was put in place in the 1940s, but the potential for it to be triggered was flagged after the 2011 Canterbury earthquakes.

Ms Woods says the initial $NZ50 million payment has come earlier than forecast due to the pace of claims settlements, a Land Information New Zealand settlement being finalised and reinsurance payments coming due.

“The payment to the EQC is an operating grant and provides additional financial support… alongside the Natural Disaster Fund and the EQC’s reinsurance program,” she said. “It provides a buffer so the EQC can continue to pay claimants.”

EQC CEO Sid Miller says the commission will work to rebuild its resources and the Natural Disaster Fund while the guarantee maintains the scheme’s financial footing.

New Zealand last year increased the EQC levy on householders’ insurance to 20 cents per $NZ100 ($92.20) of cover, from 15 cents previously, to rebuild the fund.

The Government has this year stepped up moves to more quickly resolve the remaining Canterbury claims.

“Of the 3600 open claims the EQC had on hand in May, 60% have now been resolved and the average number of claims resolved per week has increased by 31%,” Ms Woods said.