New Zealand’s Earthquake Recovery Minister Gerry Brownlee says he is doubtful about handing over Earthquake Commission (EQC) claims to private insurers.

He addressed the matter at the Insurance Council of New Zealand’s (ICNZ) conference last week.

Treasury is currently reviewing natural disaster cover, which falls under the Earthquake Commission Act 1993.

In a submission to Treasury, ICNZ says insurers should assess and manage all claims, not the EQC. See other story

However, Mr Brownlee is unconvinced.

“Despite the view of some media commentators, the EQC did a very good job of organising a large assessment and repair program that created confidence that equity would be maintained for homeowners and inflation would not run way to predicted high levels,” he said.

“Taking hold of the repair program was important and I’m not keen to legislate for what could be a more diffused approach in a big event.”

But Mr Brownlee concedes there must be closer collaboration with the EQC “to deliver a better claims experience for homeowners”.

Treasury’s proposed reforms include increasing the EQC building payments cap to $200,000, covering both land and buildings.

Insurers agree on a cap rise, but want separate cover for land foundation works.

Mr Brownlee agrees interaction between land and building cover “needs to be improved”.

He praised New Zealand’s insurance model as “something of an international example for the value of a holistic approach to natural hazard risk”.

He says 98% of New Zealanders are insured for natural disasters, compared with about 10% in earthquake-prone California and 20-30% in Japan.

Mr Brownlee wants the EQC reforms to pass through Parliament before the end of next year.