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27 July 2012
Chief Reporter
Time To Put The Boot Into Insurance Companies
The Campaign Against Foreign Control of Aotearoa (CAFCA) congratulates Gerry Brownlee for "losing patience" with the insurance companies who are restricting Christchurch's earthquake recovery to a snail's pace. We are pleased that he has finally been forced to admit that these companies, most of whom are transnational corporations, are part of the problem and not part of the solution. But Brownlee than said that he didn't intend to do anything about it, sticking to his mantra of leaving it to the market. Sorry, Gerry, that's not good enough. It's time you put the boot into the insurance companies, who have shamelessly charged hundreds of thousands of Cantabrians premiums for generations and are now finding every excuse in the book, plus making up some new ones, to delay paying out or not paying out at all.
The legal term is breach of contract.
They are playing hardball with the people of Christchurch, holding the country to ransom and slowing the post-quake rebuild of the city to a crawl, indeed, they are stopping it altogether. In the good old days, when wharfies or freezing workers or inter-island ferry cooks and stewards or seamen were deemed to be "holding the country to ransom", there was major hysteria from the media and lots of big stick wielding by Tory governments. But when insurance TNCs hold a whole city and country to ransom, this Tory government simply says "leave it to the market".
The present situation in Christchurch provides a very clear warning of the perils of privatisation. Some things are just too big and important to be left to "the market", and disaster recovery must be a core function of the State. New Zealand's Earthquake Commission is unique and a model for the rest of the world (as is ACC). Every Christchurch quake claimant, me included, has at least one horror story about their dealings with EQC But imagine if there was no EQC - even with all its faults - and disaster recovery was entirely the responsibility of insurance companies, as it is in plenty of other countries.
This Government is a big fan of public private partnerships (PPPs), which come complete with performance-related penalties (Serco, the transnational corporation running Auckland's private prison has been fined hundreds of thousands of dollars by the State for breaches of its key performance indicators). So, if the Government is pigheadedly committed to letting "the market" i.e. insurance companies dictate the terms of the Christchurch recovery, then how about applying some market regulatory principles to EQC's private sector partner. Prosecute the insurance companies for their tardiness and obstructionism; compel them to honour their policies to the letter.
And if that still doesn't work in a timely manner, then the State needs to step in and nationalise those insurance companies which prove to be terminally negligent in their duties. If necessary, the State should become the insurer of last resort. Unusual circumstances call for unusual measures.
This is not just a Christchurch problem. Insurance companies have reassessed the threat posed to the profits by New Zealand being a "risky" country and ramped up their premiums right across the country. And these are the same insurance companies that stand to directly benefit from the Government "opening to competition" ACC's lucrative workplace compensation account. They will apply exactly the same delaying and cost-cutting tactics to New Zealanders injured in accidents as they are currently deploying against Christchurch homeowners and businesses. Yet another good reason to keep ACC and other State assets in public ownership.
Murray Horton
Secretary/Organiser
Campaign Against Foreign Control of Aotearoa,
P.O. Box 2258
Christchurch.