EQC sets aside millions of dollars to reimburse insurers

EQC sets aside millions of dollars to reimburse insurers | Insurance Business

EQC sets aside millions of dollars to reimburse insurers

The Earthquake Commission (EQC) has set aside millions of dollars to pay insurers what they are owed, following the Canterbury earthquakes.

The EQC and insurers agreed to pay earthquake claimants then just get reimbursements later, called “wash-up payments,” when they had more resources. However, insurers are now getting tired of waiting for the money.

Renee Walker, deputy chief executive of readiness and recovery at EQC, said they’re having “amicable” discussions with insurers about the wash-up payments that they owed from the earthquake claims.

“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.

Read more: EQC flooded with claims after Southland earthquake

Tower Insurance had already made a move to seek reimbursements by entering 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,” insisted Richard Harding, chief executive at Tower.

A spokesperson for IAG NZ said they’re also waiting for reimbursements and are open to taking 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,” the spokesperson told RNZ.

Walker, however, said they don’t want the issue to escalate, adding: “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.”

“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 are avenues for them to have outstanding issues resolved,” Walker concluded.