thechristchurchfiasco

"Shifting the Balance of Power in the insurance industry – back to the policyholders! "

About damn time…..or is it lipstick on a pig?

8 Comments

Finally after more than five years of messing around with the lives of thousands of Cantabrians the Insurance Council has introduced a new code of conduct for its members. Insurers face a potential fine of up to $100,000 (yes that’s all) for breaching new industry standards including time frames for responding to claims.

Unlike our Australian counterparts there has been no maximum time frame in New Zealand by which an insurer must have settled a claim. Despite the new measures, insurers are still only required to meet minimum time frames for responding to the public when claims are made and keep them informed about the progress of their claim.

New Zealand insurers have performed appallingly. It is reported that insurance companies in the Christchurch market have been rated the world’s slowest to respond to a major disaster. The insurance broker Marsh released a report showing how the performance of Christchurch insurers compared with that of their counterparts in Japan and Chile after recent major disasters in those countries. Throughout the last five years we have heard the much repeated cry about the Christchurch earthquakes having been an unprecedented event. Yet in the Marsh Risk Management Research Report a comparison is made of the following earthquakes: Chile, February 27, 2010; New Zealand, February 22, 2011 and Japan, March 11, 2011 comparing, coverage elements, policy features, and practical considerations in relation to each event. David Pigot, Chairman of Global Claims Practice (Marsh) states that “New Zealand was the least prepared of all from an insurance perspective. Although the country was conscious of earthquake risk and had a long-standing insurance scheme run by the Earthquake Commission (EQC)…”

Insurers in New Zealand are right to be concerned about their reputations as a result of their handling of the Canterbury earthquakes…and still there are thousands of claims to be settled. In addition, the courts are backed up with cases waiting to be heard and group actions are also in progress.  And there will be more.

I find it extraordinary that in a country  known throughout the world as ‘the shaky isles’ that the insurance ‘code’ did not take catastrophe situations into account. The revised Code, which came  into effect on 1 January 2016 is said to commit ICNZ members to ‘higher standards of service’ in all their dealings, not just with respect to claims. But let’s face it, as usual the document and its content are  like a slippery fish.

Key changes to the new Code include:

  • “Enhanced, effective communication with the insured, particularly concerning up-front disclosure of key information;
  • Insurers committing to act reasonably when faced with the non-disclosure of relevant information by the insured;
  • Introduction of best-practice time frames for communicating with the insured at claim time;
  • Insurers will train their staff and agents about the Code so they can fulfill their responsibilities as well.”

Isn’t it time that we were having a very careful look at:

  • the timeliness of insurers’ decision-making;
  • the adequacy of communication with policyholders;
  • the adequacy of the assessment process
  • the adequacy of information given to policyholders whose claims were denied;
  • the process and timeliness of internal dispute resolution

You may remember that insurers in Canterbury established a vulnerability index to prioritize the most vulnerable in the recovery process. A requirement to prioritize the vulnerable has also been included as a mandatory requirement for insurers – presumably this is to avoid situations like that of Mrs Dot Boyd who at 85 years of age was living out of boxes while still waiting for repairs to her home three years after the event, despite her plight having been brought to the attention of authorities eight months earlier.[i] And then there was Alf Johnson, a 92 year old from St Martins asks “why am I still waiting for a new house?”[ii] His insurer, State Insurance, says the company was aware of Alfred’s situation and had prioritized him based on his age and the condition of his home.

SAMSUNG CAMERA PICTURES‘Serious breaches’ of the new code, which came into effect on Friday, could be punishable by fines of up to $100,000. Claim resolution that takes five years is in my book a very serious breach…..  Don’t hold your breath – the corporate leopard rarely changes his spots.

1916622_10207994127274995_7884592191225086068_n

And what about EQC – probably the deliberately worst performer of them all – where is its ‘Code of Practice’?

 

[i] EQC bosses meet Brownlee over plight of elderly victims, Fairfax NZ, Christchurch Press, March 08, 2014.

[ii] Alf, 92, waiting on tardy insurer, Ashleigh Stewart, Christchurch Press, March 25, 2014.

Read more: http://www.3news.co.nz/business/new-rules-for-insurers-come-into-force-2016010108#ixzz3vz8GpeV7

Author: Sarah Miles

Trained as a lawyer, psychotherapist and mediator. My goal is to make my voice heard for the causes in which I believe so as to improve and contribute to a more sustainable and equitable society. I believe in the enormous power of the human spirit and the power within each of us to effect major change. "The only triumph over evil is for good men [and women] to do nothing". https://thechristchurchfiasco.wordpress.com/

8 thoughts on “About damn time…..or is it lipstick on a pig?

  1. Do you mean maximum time frame ( the longest it should take) ?

    Like

  2. Yep, five effing years.
    That’s my place.
    It’s now 18 months since I was deemed a rebuild and I’m still waiting.

    Like

  3. The Insurance Industry has proven itself not trustworthy enough to self regulate. This is merely more ‘sop’ work designed to restore the public’s confidence in this dishonest, dishonourable Industry. An understandable tactic given that the CEO of the Insurance Council is a professional spin doctor drafted in (post quake) from the Political world for this exact purpose.
    “REGULATE THE INSURANCE INDUSTRY”

    Like

  4. So what’s being said is that they have added some words like ‘enhanced’ ‘effective”committed”reasonably”adequacy’ that are totally open to interpretation and manipulation and nothing has or will change. Still waiting for my repair!

    Like

  5. well after five years I guess that is a small mercy, not that we, as red-zoned victims, were given any choice 3 1/2 years ago …and besides that’s not my house pictured …it disappeared pretty quickly once we were settled! very interesting, is it not? [land grab?]

    Like

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s