The New Zealand National Party has welcomed the announcement of reforms to the EQC Act but is calling on the release of information around one that could be prohibitively expensive.

“EQC cover is unique to anywhere else in the world and works very well,” National EQC spokesperson Stuart Smith said. “The reforms announced by Megan Woods today are largely a result of the review of the Act announced by the National Government last year.”

Smith said he is pleased with the government picking up most of the recommendations particularly raising the cap from $100,000 to $150,000.

“However, extending the claim period from three months to two years will prove incredibly expensive and problematic,” he noted. “In a big event, it will confuse arguments of apportionment between reinsurers; so the Minister needs to answer how different events are defined within that two year period.”

He claims that the announcement is likely to cause significant increases in costs to policyholders.

“I’d like to know from the Minister what advice she has had from the Treasury about how much this will be – and whether Treasury supports the extension of the claims period,” Smith added. “I am calling on the Minister to release Treasury’s advice on this matter.”