Key agencies and their system roles
The Treasury (Government department)
- System leadership and oversight
- Providing policy advice
- Performance monitoring of NHC
The Natural Hazards Commission (NHC) (crown entity)
On 1 July 2024 the Natural Hazards Insurance Act (2023) replaced the Earthquake Commission Act (1993). The Earthquake Commission (EQC) was renamed the Natural Hazards Commission (NHC) from that date.
The Commission has the following functions:
(a) to administer natural hazard cover, in particular by managing and settling claims
(b) to manage the Fund, including by investing the Fund, in accordance with this Act
(c) to collect the levy in accordance with this Act
(d) to arrange reinsurance or other risk transfer products in respect of all or part of natural hazard cover
(e) to facilitate research and education, and to contribute to the sharing of information, knowledge, and expertise (with the Crown, public and private entities, and the public generally), including in relation to:
(i) natural hazards and their impacts
(ii) damage to residential buildings, residential land, and other property as a result of natural hazards, including how that damage might be prevented or reduced
(iii) community resilience to natural hazards
(iv) natural hazard risk management
(v) planning for, and recovering from, natural hazards
(vi) natural hazard cover and the operation of this Act.
(f) to support the Minister in performing the Minister’s functions, including by providing information, knowledge, and expertise (whether in relation to the matters set out in paragraph (e) or in relation to other matters)
(g) to monitor compliance with this Act, investigate possible offences against this Act, and enforce this Act
(h) any other functions conferred on it:
(i) under this or any other Act; or
(ii) by the Minister under section 112 of the Crown Entities Act 2004 (including the function of facilitating the arrangement by the Crown of reinsurance or other risk transfer products in respect of Crown risks beyond those covered in this Act).
Collaboration and information-sharing between system agencies
- Ministers, on advice of Treasury, send an annual Letter of Expectation (LoE) to NHC. It is expected that the LoE will be taken into account when the Board undertakes strategic planning and sets measures for performance reporting.
- Board appointments: The Treasury advises on Board appointments and reappointments, to ensure the Board has the relevant combination of skills/experience and leadership to effectively govern NHC.
- Ministerial Directions: The responsible Minister from time to time, on advice of Treasury and/or NHC, can direct NHC regarding existing functions or taking on new functions.
Read an EQC-authored briefing on all Ministerial directions made since 1994. - The Treasury and the NHC regularly work together on the gamut of shared organisational monitoring, performance and policy issues and routinely consult each other in the development of advice for the responsible Minister.
Regulated parties and main stakeholders
Regulated parties
- NHC
- Homeowners
- Private insurance businesses
Main stakeholders
- Homeowners
- New Zealand Claims Resolution Service (NZCRS/Canterbury Earthquake Insurance Tribunal/courts
- Insurers (reinsurers), the Insurance Council of New Zealand (ICNZ)
- Science and research organisations including GNS Science, and other Crown Research Institutes and universities.
- Local government has a strong interest in NHC's contribution to resilience and recovery.
Processes for engagement with regulated parties and stakeholders
- NHC. The Treasury regularly engage with the NHC as set out above.
- Homeowners:
- The interests of homeowners are represented by the NHC's National Reference Group.
- NHC have a function to facilitate research and education about matters relevant to natural disaster damage. For example, the NHC promote information on their website aimed at teaching homeowners what they can do to their properties to minimise the risk of damage.
- Communities. Along with representing the interests of homeowners, the National Reference Group (NRG) comprises representatives from a range of customer groups, iwi and ethnic communities and emergency management. It will provide NHC with valuable perspectives and expertise across a range of sectors, and also be an important link with any event-specific community groups established after a major event.
- Private Insurance businesses. The Treasury and the NHC, both together and separately, meet with insurers on an ad-hoc basis to discuss the interaction between the NHC scheme and private insurance market. Insurers are also represented by ICNZ.
NHC also has strong governance, engagement and assurance arrangements in place to support the Natural Disaster Response Model (NDRM), which commenced on 30 June 2021. Under the NDRM, New Zealanders will have a single point of contact to support their insurance recovery if their home or land is damaged in a natural disaster. The partnership model has a singular focus on improved customer outcomes and sees insurers managing claims for NHC's natural disaster insurance cover on behalf of NHC.