The Insurance Council of New Zealand has rejected Labour’s plans to set up an arbitration tribunal against insurers in Christchurch.
According to the latest report from
ICNZ, insurers have been at pains to settle claims in Canterbury as quickly as possible – over 95% of all residential claims are settled.
Insurers are committed to settling claims as quickly as possible, but the proposed tribunal is not the right way to do it, ICNZ Chief Executive
Tim Grafton said. “This is a misconceived, poorly thought through seat-of-the-pants policy that runs roughshod over natural justice,” he said.
Insurers helped establish and fund the Residential Advisory Service (RAS) – the service to which Labour is pledging more money, Grafton said.
“We also have a justice system in New Zealand where judges sit in judgement over cases. What does it mean to our sense of justice when Labour picks lawyers to run an inquisition over insurers?” Grafton said. “Who are these lawyers? Will their decisions be appealable consistent with the rules of natural justice? What is an undue delay?”
Existing processes were also adapted by RAS,
IFSO, Parliamentary Ombudsman, and
EQC which try to settle disputes before having to go to court. These schemes, Grafton said, have also been successful in resolving claims.
“Claims-settlement delays have been contributed to by homeowners and by EQC. Would Labour be suggesting that homeowners and EQC could be liable to insurers for undue delay? If EQC is to pay, then where will that money come from? Taxpayers?” Grafton said. “Insurers are still receiving over-cap claims from EQC, seven years after the first earthquake. EQC would have to be a party to Labour’s scheme as EQC is involved in every residential Canterbury Earthquake. Is Labour suggesting EQC is liable to pay for its delays?”
According to ICNZ, three weeks to submit documents is laughable, given the complexity of contested expert evidence, apportioning loss between events, etc. in so many of these disputes.
ICNZ asked whether the tribunal would only be able to look at unsettled cases or would it also be able to reopen settled cases. “If the suggestion is to open up full and final settled claims, this raises serious concerns about Labour's commitment to uphold contract law,” ICNZ said.
“The proposed power to compensate for undue delays that have already happened is retrospective, and therefore flouts the rule of law. Labour expects the tribunal would not be operating until 2018 – by which time the vast majority of claims will have been settled. What will be left for the tribunal to do?” Grafton said.
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