The Earthquake Commission (EQC) has set aside millions of dollars to pay insurance companies what they are owed from Canterbury earthquake claims, while they fight over liability.
EQC deputy chief executive of readiness and recovery Renee Walker said it was having “amicable” discussions with all insurers about “wash-up payments” it owed them following the Canterbury earthquakes.
“We do need to work through who is the right organisation to pay the cost, and because of the size of the payments involved, it is not a process that can be worked through in a week,” Walker told RNZ Business.
Walker said it had reimbursed some smaller insurers for payouts made to Canterbury residents to repair properties and land foundations on behalf of the EQC.
She would not disclose how much money it had put aside for the larger insurers, citing commercial sensitivity, but said it was within the ballpark of what they were claiming.
It did not include provisions for legal costs, she said.
The EQC and insurers agreed to pay claimants following the Canterbury earthquakes and seek reimbursements later, dubbed wash-up payments, when they had more resources, however insurers had grown impatient waiting for the money.
The listed insurance company Tower had entered into a dispute resolution process with the EQC over $53.1 million it had not been paid.
“It is money that is owed to Tower shareholders and policyholders. We want to pursue it to its fullest,” Tower chief executive Richard Harding said.
Harding said lawyers were involved and it was likely to take legal action against the EQC.
A spokesperson for the insurance giant IAG, said it was also owed money from the EQC and had not ruled out legal action.
“IAG is confident that, at this stage, this matter can be resolved but we cannot rule out seeking a decision from the court to recover the money payable to IAG should that be necessary.”
Walker said EQC did not want the issue to play out in court.
“We do have an allocation in our valuations for wash-up purposes and we would hope that we can negotiate a settlement with each insurer directly.”
Meanwhile, EQC was continuing to bring over-cap claims above $100,000 to Tower, but the company had begun pushing back, describing its perceived liability for the claims as ‘unacceptable’.
A number of claims remained in the balance between the two insurers, but Walker could not recall if those claimants had been paid.
“I can understand for insurers that they are frustrated that they are continuing to get over-cap claims eight years later, but actually what that means for homeowners is that there is avenues for them to have outstanding issues resolved,” Walker said.
This article was originally published on RNZ and re-published with permission.