EQC REVEALS LOSS OF NZD7.1M

The New Zealand Earthquake Commission (EQC) has revealed a loss of NZD7.1m ($5.9bn) in the wake of the Canterbury earthquakes, destroying its natural disaster fund of NZD5.9bn. In the financial year to June 30 2011 the EQC booked claims and expenses totalling NZD11.4bn from the quakes. It had NZD4.2bn in reinsurance cover. Meanwhile, the EQC premium levy increase comes into force from today (IIN 24, October 11 2011). For every NZD100 in cover, the levy rises to 15¢ from 5¢. The annual maximum homeowner premium for EQC protection will rise to NZD207 ($171). The government is in a sense moving away from New Zealand's principle of "no fault" insurance, in that it has decided against an earthquake tax on all taxpayers. The government said that this would mean that all taxpayers would be subsidizing insured homeowners. The levy, which the New Zealand government has admitted may have to be adjusted again, aims to enable the EQC to rebuild its natural disaster fund to NZD6bn over a 30-year period.