News eDaily29 Aug 2017

New Zealand:Insurance body says quake claim tribunal is bad idea

29 Aug 2017

The Insurance Council of New Zealand (ICNZ), which represents general insurers in the country, has rejected the opposition Labour Party's plans to set up an arbitration tribunal against insurers in Christchurch.

“This is a misconceived, poorly thought through seat-of-the-pants policy that runs rough shod over natural justice,” said Insurance Council Chief Executive Tim Grafton in a statement.

“Insurers have been at pains to settle claims in Canterbury as quickly as possible – over 95% of all residential claims are settled.   Insurers are committed to settling claims as quickly as possible, but the proposed tribunal is not the right way to do it.

“Insurers helped establish and fund the Residential Advisory Service (RAS) to help people navigate through their claims. This is the service Labour are pledging more money to.

"Insurers waived their rights to close of claims under the Limitation Act to help people to have more time to settle their claims in response to public demands.

“We already have a free system available to homeowners to take complaints against insurers already.

“We also have a justice system in New Zealand where judges sit in judgement over cases. What does it mean to our sense of justice when Labour picks lawyers to run an inquisition over insurers?

“Who are these lawyers? Will their decisions be appealable consistent with the rules of natural justice? What is an undue delay?"

Mr Grafton said that the RAS, Insurance & Financial Services Ombudsman, Parliamentary Ombudsman, and Earthquake Commission (EQC) have also adapted their existing processes to try to settle disputes before having to go to court. These schemes have also been successful in resolving claims, he said.

He added: “Claims settlement delays have been contributed to by homeowners and by EQC. Would Labour be suggesting that homeowners and EQC could be liable to insurers for undue delay? If EQC is to pay, then where will that money come from? Taxpayers?

“Insurers are still receiving over-cap claims from EQC, seven years after the first earthquake. EQC would have to be a party to Labour’s scheme as EQC is involved in every residential Canterbury Earthquake.”

Labour Party leader Ms Jacinda Ardern in a speech last Sunday said that the party, if elected to power, would provide extra funding for the RAS and establish an arbitration tribunal to fast track the resolution of insurance issues from the 2010 and 2011 Canterbury earthquakes. The tribunal can award compensation for distress caused by undue delays by insurance firms in processing claims.

Mr Grafton also said: “The proposed power to compensate for undue delays, that have already happened, is retrospective and therefore flouts the rule of law. Labour expects the tribunal would not be operating until 2018 – by which time the vast majority of claims will have been settled. What will be left for the tribunal to do?”

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News

Follow Asia Insurance Review