Council insurer Civic Assurance director pay hike opposed

Council insurer Civic Assurance director pay hike opposed | Insurance Business

Council insurer Civic Assurance director pay hike opposed
Council insurer Civic Assurance wants to raise its directors’ fees by 15% but some civic leaders say the organisation should be showing restraint and they’re opposed to it.

The move comes in the wake of Civic’s pay out of New Zealand’s largest ever insurance claim, of $635 million, to the Christchurch City Council.

However, the Canterbury earthquakes cut its reserves and caused a credit rating downgrade. It now has a provisional licence from the Reserve Bank and cannot write new policies until its licence is restored, Fairfax Media reported.

Wellington's deputy mayor Justin Lester said the move 'stuck in his craw' as there were community groups with voluntary boards who arguably did more work.

One industry commentator questioned whether the directors should get an increase given Civic’s inability to write new business.

“What private insurance company would let their directors have a 15% hike in pay when the regulator is breathing down their neck and preventing new business because of the organisation’s risky financial position?” asked Jordan Williams, executive director of the Taxpayers’ Union.

But Civic Assurance CEO Tim Sole said the board was paid in the lower quartile compared to those serving on other companies and they deserved more.

Two directors – chairman Tony Maryatt, who is former CEO of Christchurch City Council, and Mark Butcher, CEO of Local Government Funding Agency – were due to retire by rotation this year but had offered themselves for re-election.

“This year there was no one contesting for the two vacancies, the two incumbents are carrying on,” Sole told Radio New Zealand.

He said the board had worked hard in recent years, including on the Christchurch City Council claim, and they deserved more.

Sole also said he hoped a fee hike would help attract people of the right calibre in the future.