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Industry body highlights major omission in COFI bill

“While COFI captures the conduct of insurers, it does not capture the conduct of the EQC,” Gorham said.

“While not technically considered an insurer or a financial institution, there is no denying that EQC currently provides the first cap of $ 150,000 of natural disaster coverage for every household in New Zealand.”

Read more: COFI “adds compliance costs” without any benefit

“This, whether they are individual or terraced houses, units or apartments, which can be in buildings dedicated to private residences, or in mixed-use buildings which also contain shops, offices. etc., ”she explained.

“In many cases, residences in retirement villages are also covered by the EQC cap, as are parts of other commercial buildings used as private residences, such as hotels, motels and pubs.

“Not including EQC in the COFI bill is a worrying omission, especially given the challenges faced (and still faced) by natural disasters in New Zealand over the past decade.”

Gorham acknowledged that while private insurers will largely manage the natural disaster claims process, the non-inclusion of EQC in the COFI bill will still lead to uncertainty and could “restrict product choice. Because the partnership agreement does not every insurer in New Zealand.

“The regulatory consultation paper released by MBIE identifies agreements between EQC and certain insurers that these insurers will handle claims on behalf of EQC,” she said.

Read more: COFI: The voice of the industry has been heard

“This is not an adequate solution in our opinion, as the agreements are concluded for a period of time and only concern certain insurers who act as an agency (not as insurers) with regard to the ceiling EQC. “

“We believe that the points we have raised will lead to uncertainty, impact the availability of independent financial advice and restrict the choice of products,” she concluded. “Consequences that will worsen rather than improve outcomes for those COFI seeks to protect.”

“We appreciate being involved throughout the consultation process and hope that the lingering issues we have identified with the bill will be resolved.”

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