Woods unveils a raft of reforms to settle outstanding EQC claims

Report confirms there's a big job to do to get claims moving faster.

Earthquake Commission (EQC) Minister Megan Woods has accepted the need for a wide range of reforms to speed up the resolution of outstanding EQC claims, as outlined in a new report.

The report was prepared by NZ Customs acting chief executive Christine Stevenson, who was appointed the independent ministerial adviser to identify ways to improve the settling of claims.

The document reveals sizeable issues with staffing levels, data quality, record keeping and organisational culture and structure that are holding back resolution of claims.

Ms Stevenson says the challenges to settling unresolved claims generally arise from on-sold properties, defective repairs, time frames, the scope of insurance cover arising under the EQC Act and differing policies of private insurers.

Ms Woods says the findings of the report confirm there’s a “big job to do” to get claims moving faster. The document contains recommendations to improve the way EQC operates, get claims sorted and to help people move on with their lives, she says.

Ms Stevenson admits the 2010 Canterbury earthquakes placed “extraordinary demands” on the EQC.

“A number of tough decisions had to be made quickly and were made with good intentions and in good faith and for good public policy reasons.”

The recommendations fall into several broad categories: those EQC will have the responsibility for implementing, those the Treasury and Ministry of Business need to work with EQC on, and those that are more progressive and need a whole-of-system approach.

Changes include:

• hiring more staff to reduce the caseloads for case managers so claimants can get more personal attention;

• establishing a claimant reference group, comprised of claimants and community representative advocates who are paid for their time and expertise to advise EQC on how to improve the treatment of their customers;

• making any claimants’ EQC file available to them on request and introducing a standard for better communication with claimants;

• having a team of experienced EQC staff pull out all of the physical claims files relating to the remaining claims, and have the team sort, review, confirm and capture the key data to ensure it is correct; and

• increasing government monitoring to improve accountability.

There are also broader recommendations including allowing EQC more flexibility to make cash settlements above the EQC cap, which would then be recovered from the private insurers.

National’s EQC spokesman Stuart Smith says the report is a “positive step” but he wants to see clarity around who foots the bill for damage to on-sold homes and a timeline on the changes.

“If the insurance company is going to be paying out on those over-cap claims, what mechanism is EQC going to use to recover that from the insurance companies?

“I suspect that is not going to be as easy as it sounds,” Mr Smith says.

He also thinks it will be difficult to draw the line between old and new damage given the length of time it has taken to settle claims.

Ms Woods says another recommendation the government is beginning to work on is to significantly scale up the Residential Advisory Service, which provides independent help to claimants. The service has helped resolve more than 4000 outstanding claims.

“The report recommends funding RAS to help claimants access independent psycho-social support.

“This is about recognising the enormous emotional toll that these claims processes can take and making sure people have access to support,” she says.

Ms Woods says she accepts all the recommendations and has asked Dame Annette King, the interim board chairwoman, to begin implementing changes immediately.

She has also asked for a group of chief executives from various government agencies to come together to implement the recommendations.

As result of the earthquakes, over 770,000 individual residential building, land, and contents claims were opened. Nearly all these claims have now been settled and a comparatively small number of claims remain open.

“Most of the claims still sitting with the EQC are re-opened claims, many are complex in nature, and the process to resolution is not straightforward,” the report says.

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