System's fitness for purpose
Reviews and/or assessments of the system include:
2012 Review of the EQC Act – considered EQC cover, funding and institutional design. A public discussion document was published in July 2015 (PDF, 233 KB).
EQC Amendment Act, February 2019 – legislative changes focussed on high priority changes to provide useful improvements should another major event occur before a more comprehensive policy review of the EQC Act is completed and implemented. These changes increased EQC building cover from $100,000 to $150,000, exited EQC from contents cover, extended claims filing deadlines, and improved EQC's information-sharing powers. Read the departmental initial briefing to the Select committee (PDF, 1.04 MB).
Public inquiry into the Earthquake Commission - In November 2018, the Government established a public inquiry ("the inquiry"), led by The Hon. Dame Silvia Cartwright, to examine the role and work of EQC and to learn lessons that can be applied to how it operates in future.
The inquiry released its report in March 2020. The Inquiry concluded that New Zealand is fortunate to have a scheme that has such high levels of coverage. However, the inquiry identified gaps and inconsistencies in the EQC system that negatively impact the effectiveness of that system and set out a number of recommendations. For example:
- To clarify the purpose and roles of the EQC: The purpose of the EQC as a body has not been made sufficiently clear by Government. This hampers the effectiveness of planning and preparedness for natural disasters. There is also a need to clarify expectations for whether EQC, or another agency, will be responsible for managing housing repair in response to a future large-scale event.
- Update the legislation: A number of definitions in the Act are unclear and need to be reviewed in light of experience, including case law. The lack of clarity has led to undesirable and inefficient outcomes as it makes the regulatory framework harder to comply with.
- Review the EQC cap: Review the EQC cap on residential building cover to establish whether it should reflect at least the current building costs and provide a mechanism for regular adjustment.
- Greater provision of information from private insurers: EQC may not have sufficient powers to require information on claimants from private insurers, damaging the efficiency of the EQC's work.
Planned regulatory amendments and improvements include modernisation of the EQC Act, which was identified in the public inquiry into the Earthquake Commission. An EQC Bill is anticipated to be introduced into the House in late 2021. The public will be able to make submissions to the select committee on the Bill.
The Bill draws on previous policy processes, including the 2015 discussion document, and the findings of the public inquiry. Both those processes provided opportunities for public consultation and feedback. In addition, Treasury has routinely consulted EQC and private insurers on policy issues associated with the EQC Bill.
Key service design and operational changes are included in the NDRM noted earlier. More information on the Natural Disaster Response Model is available on the EQC website.
EQC also continues to grow its Resilience and Public Education work, a key recent milestone was publishing Research Investment Priorities Statement for the next two years, which can be found on the EQC website: https://www.eqc.govt.nz/news/eqc-sets-two-year-research-funding-direction