The Government has completed work to modernise the Earthquake Commission Act 1993.
The Natural Hazards Insurance Act 2023 (NHI Act) received Royal assent in February 2023 and will replace the Earthquake Commission Act 1993 (EQC Act) from 1 July 2024. The new Act will apply for new claims for natural hazard damage to residential properties that happens on or after 1 July 2024.
The work to modernise the Earthquake Commission Act took into account the findings of the Public Inquiry into the Earthquake Commission. More information on the Government’s response to the Inquiry is below.
Cabinet made key policy decisions for the NHI Act in early 2022. See the proactively released key advice documents related to modernising the EQC Act Treasury Advice Related to Modernising the EQC Act Information Release (December 2021).
The proposals also built on previous Treasury work on the EQC Act, including the 2015 discussion document: New Zealand's Future Natural Disaster Insurance Scheme: Proposed changes to the Earthquake Commission Act 1993 (July 2015).
The NHI Act also implements 2020 Cabinet decisions on the treatment of mixed-use buildings under the EQC Act. The implementation of these decisions was previously delayed due to Covid-19 priorities. See the Cabinet paper and minute on Mixed use buildings under the Earthquake Commission Act 1993.
NHI Act regulations
Commencement of the NHI Act requires the making of associated regulations and other secondary legislative instruments. The proposed regulations will support the effective operation of the NHI Act. Work is ongoing to finalise the regulations that need to be in place when the NHI Act comes into force on 1 July 2024.
Cabinet had agreed to the policy behind some of these regulation. The relevant Cabinet paper and minute have now been published on the Treasury website:
- Cabinet Paper: DEV-23-SUB-0185: Natural Hazards Insurance Act: Proposed Regulations (October 2023)
- Cabinet Minute: DEV-23-MIN-0185: Natural Hazards Insurance Act: Proposed Regulations (October 2023)
There will be further work undertaken by Treasury in 2024 to finalise the remaining regulations.
Māori and iwi consultation document
As part of the process of modernising the EQC Act, the Treasury released the following consultation document Modernising the Earthquake Commission Act: Consultation with Māori and iwi
The purpose of this consultation note was to bring this work to the attention of interested iwi and Māori organisations and provide those groups an opportunity to raise any issues or concerns they might have. The high-level overview of the proposals contained in the consultation note will also be useful to other individuals and groups interested in these reforms.
2021 decision to increase the EQC Residential Building Cap
The government announced on 30 September 2021 that from 1 October 2022 the monetary cap for EQC residential building cover would increase from $150,000 to $300,000 per dwelling (both amounts excluding GST).
Public Inquiry into the EQC
Following the release of the report of the Public Inquiry into the Earthquake Commission (EQC), the Government issued a formal response and outlined a work programme to take forward the Inquiry’s recommendations. Read the full Government response to the Public Inquiry into EQC.
See the proactive release of documents shared with the Public Inquiry into EQC:
- Material Provided to the Public Inquiry into EQC Information Release - Part 1 of 2
- Material Provided to the Public Inquiry into EQC Information Release - Part 2 of 2
2019 changes to the EQC Act
In February 2019, the Earthquake Commission (EQC) Act changed. Four key changes were made:
- facilitating EQC sharing claims and property-related information, including to prevent or lessen a threat to public health and safety
- extending the timeframe for lodging an EQC claim from three months to two years, for claims arising from events occurring after the EQC Act changed
- removal of the $20,000 EQC cover for contents, phased over 12 months from 1 July 2019
- an increase in the cap on EQC residential building cover to $150,000 (+ GST) phased over 12 months from 1 July 2019.
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