The quiet dissection of the Canterbury policyholder?

 

I have been involved in events in Christchurch for longer than five years now –long enough to be able to stand back and look at this situation from a more philosophical point of view and here are some of my thoughts on the processes that have taken place during the aftermath of the Canterbury earthquakes. I have used findings from the psychology behind mass annihilation and the processes that take place in abattoirs as the basis for my observations.  I think many of you would agree that those Christchurch policyholders with unresolved claims are now under extreme pressure….

Psychology defines compartmentalization as a defense mechanism, or as a coping strategy- it’s how our minds deal with conflicting internal standpoints simultaneously. It is the social arrangement and the psychic defense mechanism in a society where targeted groups are deprived of the protection of the state and excluded from the solidarity of other citizens in situations where they are mistreated while the rest of society continues to prevail. This requires rigid separations and carefully staged passages between the different emotional and interactional domains.  A great example of this phenomena is meat eating. So even while enjoying their meat, consumers are able to forget that they are actually eating the remnants of a living being. They choose to ignore how it was raised, slaughtered and carved up, even though they do know this very well.

Even more fascinating is the process by which those in the killing industry are protected from what they do. In the abattoir the work of killing is hidden even at the site where one might expect it to be most visible: the kill floor itself. Of the many hundreds of workers on the kill floor, there are possibly only four that are directly involved in the killing of the cattle, and less than 20 have a line of sight to the killing. And only one worker (the knocker) is responsible for delivering the blow that begins the irreversible process of transforming life into death. As long as that one person exists, all the others are able to find a plausible excuse that focuses the heaviest weight of the dirtiest work on this one individual allowing the hundreds of other workers to say they were not responsible for the actual killing. Then dozens of other kill-floor workers can say; “I’m not taking part in this” and believe it. The use of language is one of the critical ways of disguising the acts of violence. From the moment the cattle beast is unloaded, it is referred to by staff as “beef.” And even though they are still living, breathing, sentient beings, they have already linguistically been reduced to inanimate flesh. Technical issues such as temperature, bacteria count, acid concentration, and sanitization of cutting equipment become the primary focus – the unceasing taking of life is no longer the focal point.

How else could a society manage to entice loss adjustors, engineers and other so called ‘professionals’  to treat vulnerable families in the way they are being treated in Canterbury, knowing full well the fate awaiting them? How do you override a human conscience like that, and so efficiently? This has been referred to as the ‘bureaucratization of barbarism’.  The acts are perpetrated, in a calculated and detached manner and take place in demarcated spaces, in delineated episodes – separated from the rest of society. And those who coerce, and those who drive those wedges, often have something to gain – a job or bonuses! We witness a substitution of external authority over individual autonomy. The advanced stages of compartmentalization are incompatible with a free press (if there is such a thing) and free association or with legal guarantees of freedom of speech and movement. I would argue that we have seen this too!

This compartmentalization allows abuse without guilt. And while a senior claims manager might be a heartless ‘son of a bitch’ to his employees, he is equally able to be a devoted family man at home. While a harsh disciplinarian at home can be highly regarded by both friends and acquaintances outside the home.  Compartmentalization aids the capacity of humans to dehumanize ‘the other’.  Just like soldiers learn to psychologically separate the allies from the enemy, treating the other as less than human. The insurance industry and those associated within it, often regard the policyholder as a ‘fraudster’, ‘overly entitled’, ‘greedy’ etc. Within the confines of these compartments, civilization has been temporarily suspended, and under carefully controlled conditions, slyly constructed (the creation of CERA, MBIE Guidelines, existing use right exemptions, insurance company internal processes, etc.) ‘decivilization’ is allowed to proceed. The government has sat back and watched the barbarism take place, while allowing it to be carefully encapsulated into special compartments of local decivilization e.g. Christchurch East, or anyone unable to seek legal redress. Even a Minister who is a citizen of the City appeared blind to the fraud and suffering heaped upon the population by both government departments and the corporates. Decivilization has occurred in well-defined episodes and spaces (e.g. the red zone, flood prone areas, closures of community based schools). The national press has further ensured that the knowledge of the slaughter has been confined to just Canterbury.

An insurance claim process is also compartmentalized. This is no accident. The front office is isolated from the back office, which is in turn isolated from the claims department which is in turn isolated from senior management and accounting. Only a couple of people in the organization have the power to make the final decision on payment. This compartmentalization continues throughout the organization. It is entirely possible to spend years working in the underwriting department or claims department without ever encountering a client, much less witnessing one being ‘slaughtered’. Under certain conditions of advanced compartmentalization the menial work of slaughter is out-sourced and left to the consummate specialists, usually loss adjustors, engineers, lawyers. Contractors too, can be of use, so long as they maintain a minimum of discipline, have an easy conscience and obey their paymasters. The target group – Christchurch policyholders, by these means are further separated from each other. ‘Fraternization’ is to be avoided at all costs as the moment people get together they gain strength – there may be demonstrations. That scenario is government’s and the corporates’ worst nightmare.

Even though compartmentalization takes place at the individual level it also spreads to the wider social level e.g. the media no longer report on the stories, they are excused as “they become indifferent while by no means are they innocent of the facts. They know as much as they want to know, and what they don’t know they do not want to know. But that means that they do indeed know enough to know that they want to know no more”. (Wolfgang Sofsky, German sociologist). It has been chronicled that in many episodes of mass annihilation around the world, the rest of society maintains its pacified ways and the vast majority continue to be ‘protected’ by law, custom and etiquette. Moreover and surprisingly so, do many of your loved ones, who live elsewhere and at times wonder what all the fuss is about. They too have been “paid off;” through jobs that their livelihood depends upon. How else can we explain the deafening silence?

 

What have we learned from disaster thus far? Guest Post by Sleazkey

the insurance fiasco

Image found on fence in Christchurch

I do not consider myself to be a conspiracy theorist but I do think that we can all put two and two together when faced with clear evidence.   So let’s have a brief précis of the evidence which emerged (and continues to emerge) following the Canterbury Earthquakes:

First-up, Government established an almost totalitarian regime for management of the City.  Even the constitutional lawyers were shocked.

One man was given draconian powers and the Bi-partisan opposition appears complicit with the exception of a few locally involved politicians – who were summarily demoted for their efforts.

The People and the suburbs have been largely ignored and left to fend for themselves against both Government and the insurance corporates.

CERA was created to stand between the Government and the people – but in reality, it is just a government department with no checks or balances.  It ignored…

View original post 1,070 more words

Private Insurance Earthquake Settlement Figures Demand Greater Scrutiny: guest blog

The Private Insurance sector continues to overstate the rate of progress of Canterbury earthquake insurance settlements.

That from Christchurch accountant Cameron Preston who says figures in a media release from the lobby group¹, the Insurance Council of New Zealand, are wrong.

The Chief Executive of the Insurance Council, Mr Tim Grafton said yesterday: “Nearly 5,400 major repairs and rebuilds were completed in 2015 which reflected a 21% rise in the settlement rate last year compared with 2014”.

Cam Preston says, if the data provided by the Insurance Council’s members is be to believed, they have cumulatively completed nearly 5,400 major repairs and rebuilds in total for the 5+ years ended 31 December 2015 (since the first earthquake), and not in the 2015 year as stated by Mr Grafton.

“The data² supporting Mr Grafton’s statement, which is supplied to the Insurance Council by the its private insurance company members, via the Ministry of Business Innovation and Employment (MBIE), clearly shows that in the 5+ years since the earthquake sequence began, only 2,430 repairs and 2,865 rebuilds have been completed by its members in Canterbury,” he says.

“Their own data contradicts their CE’s statement yesterday and the vast majority of those rebuilds and repairs (13,663 or 72% of all settlements) have been cash settled so let’s not jump to the conclusion that these are “builders on the ground” completed repairs and rebuilds. There are thousands of homes in the same condition as they were after the quakes which in itself could create another problem.”

Preston says it is incredibly disappointing that figures related to something which continues to cause so much stress and upset for people unnecessarily and years after the events, are still not being presented correctly.

He adds that it is just as concerning that the rate of completed repairs and rebuilds is slowing down, not accelerating as stated by Mr Grafton.

“Let’s take a look at Southern Response, the Crown entity charged with settling 7,800 of the 25,000 claims in Canterbury. SR has completed only 967 rebuilds and 569 repairs after more than 5 years, and progress is slowing³,” he says.

“Statistics for the other insurers are not available as they simply refuse to release them, and when they do they are over-stated or incorrect. Not only are the Mr Grafton’s statements wrong, but he is obfuscating. This means the reality, which is that private insurance industry is less than 50% of the way through their repair and rebuild programmes, and more worryingly they are actually slowing down, is lost. The delays to rebuilds and repairs are designed to save the insurers money by wearing policyholders down, who after 5+ years have run out of patience and energy, so simply throw in the towel and accept low ball cash offers,” he says.

ENDS

For more information, contact Cam Preston 021 1738 772 (Canterbury Claimants)

References:

¹    http://www.scoop.co.nz/stories/BU1602/S00015/insurers-settle-20-more-claims-in-2015.htm

²  http://www.icnz.org.nz/wp-content/uploads/Canterbury-Earthquake-Progress-Stats-Q4-2015.pdf

³http://southernresponse.co.nz/images/documents/Progress_to_the_end_of_December_2015.pdf

 

Recovery fatigue – guest blog by Herman Meijburg

I have noticed that those struggling with the aftermath of the Christchurch earthquakes are having an increasingly hard time staying focused on the resolution of their claims.  It is not only my personal observation but this is substantiated in recent reports and articles published in the Press and elsewhere.  Why are there so many people in Canterbury still not doing well? Has five years been enough for Cantabrians? Are people giving up? Are Cantabrians suffering from recovery fatigue?

One thing is for sure – it has been a long wait getting to the ‘half way point’. It is fair to say that the long wait has for many been just too long. There is nothing more devastating to an individual’s motivation than ‘a wait too long’. Just like a rubber band, the long wait can stretch our resilience to a point where it’s ready to snap.

It is a fact of life that most disasters hit unexpectedly. The same goes for the Christchurch earthquakes; they took most Cantabrians by total surprise. All of a sudden widespread devastation was right in our faces, we saw buildings collapse, we witnessed how the injured and the dead were pulled out from underneath the rubble, services in disarray. Simultaneously the disaster triggered all the good-will people could muster. People stood up for each other, embraced and comforted each other; sat down and cried together. “Be strong” became the slogan in the face of adversity. And people committed to the notion of “to sticking it out” together, whatever that meant. Nationally and abroad Cantabrians were praised for their resilience (a word since often heard). And there was a firm belief amongst Cantabrians that, in the end, “everything would be alright”.

Now, after more than five years, one might ask “Where has all that resilience gone?” What is left of this initial drive and enthusiasm? Was it post-disaster euphoria?  What has happened to all our innovative ideas shared together at the beginning? Most of those ideas have not come to fruition, or have been ignored or have simply dissolved in the ether. The initial protests have also died down. The numbers of concerned citizens seems to have dwindled. Where have all the people gone? How many have simply pulled out or given up hope? Some speak of apathy. Quake jargon like ‘the rebuild’, ‘the recovery’ and ‘regenerate’ no longer tug at the strings of our imagination. Yet, according to the statistics thousands are still struggling with their insurers. Struggling Cantabrians feel isolated and in desperation have turned to social media for mutual support as the official channels do not assist them, nor solve their problems.

What are the factors that feed into why people bow out? I hear people blaming their fellow Cantabrians for their apathy. But is that a fair comment? I would like to list a few of the circumstances that might cause people to “give up”.  My thoughts on what I call “recovery fatigue” are primarily meant as food for thought and I leave it to the reader to judge their legitimacy.

In the first instance, it is a devastating experience to see your house badly damaged or even completely destroyed by the earthquakes. The loss of one’s home is for most the loss of their former life. With the earthquakes many lost their sense of place. This causes people considerable grief. Those involved in grief counselling know that in the course of time people gradually detach themselves from the actual impact, and the loss their home had on their lives. This subtle process of detachment is a way of protecting oneself from the very impact of that event. As life goes on people have had ‘to let go’ in order to accept the new normal.

It may also happen that another incident draws the attention away from the distress of initial event. The event may have caused people to lose jobs. The loss of a job makes looking for work elsewhere in the country necessary. Moving away from the place where disaster struck, not only creates a physical distance, but it also creates a distance in the psychological sense. The disaster itself is no longer in their face, emotionally it now sits at an arm’s length.  It can also be that the initial event is overshadowed by another devastating event. A family member may have become seriously ill or may have died.  And that event overrides the mayhem caused by the earthquakes as people redirect their attention to another grave situation.  Both events become “too much” to bear and people just give up. People bow out because they run out of financial resources. There are many stories of people who have had to accept a cash settlement, because they could no longer keep paying the rates, mortgage on their destroyed homes, while, at the same time, having to pay for alternative accommodation. This is a financial burden too big to bear.

After the earthquakes some affected Cantabrians were offered accommodation by generous friends or families. Of course this was meant as a temporary solution until the underlying issues were resolved. But as time dragged on, the generosity of family and friends may sometimes wear thin. They too want to carry on with their lives. Consequently the affected have had to look for alternative solutions, which are not always readily available. Some have even ended up ’living rough’ on the City streets.

The collapse of the social infrastructure in earthquake affected areas has deprived people of their community surroundings and amenities upon which they once relied. Services collapsed, schools and shops closed down. As neighbors (who once supported each other) began to move away, those who remained became even more isolated and deprived of the support of those who would have otherwise helped them ‘get through’.

As people age while waiting for a resolution, ageing itself can eat away at one’s resilience. The urgency of a proper resolution becomes even greater as one ages – because time feels as though it is running out for those who are in their later years. Urgency for resolution at the age of seventy, may be quite differently experienced from the way that urgency is experienced when one is edging toward 80. At that age people may have given up hope of seeing any immediate change in their situation. They may have different things on their mind and their priorities are reset. Many simply die waiting.

Nothing can have a more devastating effect on one’s motivation than the struggle that comes with not being fairly heard nor respectfully treated. One does not have to be an expert to understand the extent of the damage to one’s house. Most owners know the history of their properties well and are often well aware of the seriousness of the damage. The constant flow of expert reports, the reassessments of earlier assessments, the constant shift in costings, extended discussions between the insurers and strings of experts about whether or not the property is “over the cap” or “under cap” has driven many Cantabrians to the edge. Many feel exhausted by the delays this expert reporting process causes and many people find themselves in the position of having to constantly defend the degree of the damage their home has sustained over and against loss adjusters who see only historic or cosmetic damage – refusing to delve into the structural issues at hand. People have to seek legal action to get their issues properly addressed, driving up the costs for the homeowner. In a way it is as shocking as it is ironic that having disregarded earlier warnings and protests, EQC and the insurers now have to revisit thousands of homes to reassess and repair their shoddy repairs. This stretches the resilience of those affected even further, as their wait is extended potentially for another one or two more years. Many simply bow out, take a settlement and sell up to cover costs.

This tragic mis-alignment of expectations in Canterbury has led to serious disappointment amongst its residents. The lack of leadership regarding the recovery, the infighting between those in authority, between local and national government, the approach of the insurance industry to this disaster, the interference of CERA, the lack of a cohesive recovery plan based on the input by citizens, the way flooding issues have or rather have not been addressed, the handling of the people in the Red zone  and the manner in which the reinstatement of many homes and businesses was executed, have seriously fallen short of what people in Canterbury ever expected. The responses to all those issues mentioned and the decisions made by the authorities responsible for the follow up were never clear-cut, but instead ambiguous and always left one with the feeling that they were serving another agenda other than the one of relating to affected citizens. This mismatch of expectations has been very exhausting and tiring, wearing people down. This no doubt drained the resilience of many Cantabrians over the past five years.

For the reasons noted above- social media began to play an increasingly important role. Not only could people blow off steam and get rid of their frustrations, but they felt that they were ‘heard’ and responded to. They discovered and became part of an online community that cared by sharing. No wonder social media has played an important, if not a critical role in helping Cantabrians deal with the complexities of quake recovery. Social media has filled the hole left by main stream media and earthquake recovery authorities.

Over time the recovery for many Cantabrians has become an ever moving target. That too is exhausting………no wonder people give up. Is it any surprise people accept settlements that leave them out of pocket?  Others blame them for their apathy, but I for one, have come to understand this recovery fatigue many Cantabrians suffer from.

http://www.stuff.co.nz/the-press/business/the-rebuild/75695724/social-media-helps-isolated-cantabs-deal-with-quake-recovery

http://www.stuff.co.nz/the-press/business/the-rebuild/75682640/eqc-has-about-5500-shoddily-repaired-homes-to-fix

http://www.stuff.co.nz/the-press/business/the-rebuild/73514189/Survey-finds-poor-satisfaction-rate-with-EQC

http://www.stuff.co.nz/business/71419970/Six-out-of-seven-IAG-repairs-found-to-be-deficient-in-Govt-investigation

http://www.stuff.co.nz/the-press/business/the-rebuild/75918534/government-remains-happy-with-eqc-home-repair-programme

http://www.radionz.co.nz/news/regional/294612/suicide-related-calls-rise-in-canterbury

http://www.stuff.co.nz/the-press/news/75900337/whats-the-word-for-2016-another-year-in-the-christchurch-recovery

http://www.stuff.co.nz/business/money/74439864/southern-response-classified-struggling-customers-as-stoic-or-downhearted

http://www.stuff.co.nz/the-press/news/74751713/Redcliffs-reflects-on-a-broken-promise

 

 

 

 

 

 

 

 

Cantabrians begin to tell the world…

How long did the New Zealand Government and the private insurance industry think it would take before Cantabrians began to publicize their plight internationally. 2016 will see a resurgence of activity from the affected population.

 

http://www.stuff.co.nz/the-press/business/the-rebuild/69310952/christchurch-homeowner-to-lead-iag-class-action

https://www.change.org/p/iag-insurance-a-class-action-lawsuit-will-result-if-you-continue-to-mistreat-your-customers-and-this-will-affect-your-state-insurance-nzi-ami-and-lumley-brands-and-your-future-in-new-zealand-and-australia?recruiter=47938498&utm_campaign=signature_receipt_twitter_dialog&utm_medium=twitter&utm_source=share_petition

Self Regulation and the art of navel gazing…

I couldn’t let the news which appeared earlier this week go by without further comment. I am of course referring to the Insurance Council’s recent announcement regarding their new ‘Fair Insurance Code’. (See http://www.icnz.org.nz/new-fair-insurance-code-sets-high-benchmark-for-general-insurance-industry-self-regulation/).

The fair insurance code is “a set of principles that aim to improve the standard of practice and service that member companies provide to their customers.” (http://www.icnz.org.nz/for-consumers/your-rights/fair-insurance-code/). This new code came into effect on the 1^st January 2016 and itself purports to be self-regulating i.e. controlled and excised independently of governmental supervision.

“Self Regulation” is a franchise granted by government to some professional bodies to permit them to regulate the activities of their members within certain parameters and guidelines.  Engineering, Law and Medicine are typical examples.   Provided these professions keep their heads down and operate in a reasonably tranquil fashion, then the government of the day feels that it has no need to step in and manage these professions itself.  It’s a very convenient arrangement for government, often justified on the grounds of less cost to the taxpayer, but actually it is a very convenient position for government as even though these professions will often institute government “policy” (as their leaders are always pretty close to government), the government is always ‘one step removed’ from the actual decision. If there is adverse public reaction, then the Government can be seen to ‘step in’ and ‘correct’ the decision.

The insurance industry in New Zealand is such a self-regulating entity. Insurance generally in New Zealand falls under the auspices of the Insurance (Prudential Supervision) Act 2010 and is administered by the Reserve Bank for the purposes of (a) promoting the maintenance of a sound and efficient insurance sector; and (b) promoting public confidence in the insurance sector.

The Act applies to all insurers and includes a licensing system for insurers, based on meeting the Act’s prudential requirements including the prescribed jurisdictions for home/host regulatory recognition and other provisions; reassessment requirements for fit and proper certification; and matters relating to the disclosure of overseas policyholder preference etc. (See http://www.rbnz.govt.nz/regulation_and_supervision/insurers/regulation/)

The ‘consumer protection’ aspect is undertaken by the Financial Markets Authority and the Commerce Commission. (See http://www.rbnz.govt.nz/regulation_and_supervision/insurers/supervision/5045732.pdf).

As we have experienced in Christchurch these past five years, either the industry is exempt from the franchise of  self-regulation  or what has happened in Christchurch is government policy. Has anyone heard anything from the Financial Markets Authority or Commerce Commission relating to the protection of consumers in the last five years? I certainly have not.

Self-regulation was inspired by a broad-minded trend for economic liberalism and profit maximization, it  emerged in the vast majority of developed countries and is alleged to be  based on codes of conduct, codes of best practice, governance guidelines and reports. The emphasis is on `freedom, independence & autonomy’ with no or less government/state interference – sometimes a very convenient place for governments to sit.

But no freedom is unrestricted unless controlled  by ‘accountability’. We saw where that took us in 2001 – the Enron scandal, which precipitated a chain reaction of scandals and a domino effect – WorldCom, Sunbeam, Waste Management, Xerox, Qwest, Global Crossing, Tyco, Adelphia, Parmalat, and Ahold, AIG. It became obvious that the self-regulatory framework was not sufficient enough to protect companies, investors and/or employees. Mis-goverance by corporates led to the introduction of the ‘too big to fail’ convenience for international banks, who were ‘bailed-out’ with taxpayer money.  The effect of mis-governance in any corporation initiates chains of unfortunate events affecting the entire economy.  For self-regulation to be effective, it needs to be properly integrated into the overall regulatory framework – that is, it needs to dovetail with the law and the regulator’s policies and include regular direct oversight of the activities of the ‘profession’.

The insurance industry dispute resolution schemes, such as the insurance ombudsman together with  codes of conduct such as the Fair Insurance Code, involve a form of regulation where substantial industry-level involvement in the development or implementation of the regulation is involved, and where the regulatory arrangement is adopted and funded by industry.

There are major problems with this model.  It is understandable that a government regulatory authority might rely on self-regulatory schemes to cover day-to-day complaints, discipline and industry issues that it may not have the capacity to deal with, but if the self-regulatory scheme is inconsistent with the underlying principles of the overall regulatory framework, or does not operate within the parameters of that framework, then what is the role of the regulator? Why is it that we have not heard sight nor sound of the regulators in New Zealand over the past five years? How many complaints has the Commerce Commission had in relation to insurance issues in Canterbury these past five years? More than a few that I know of.

If the regulator fails to lay down the law, then the fundamental purpose to be served by self-regulation is defeated (or perhaps successfully used by government to operate policy, if one wishes to be cynical) and consumer welfare is compromised usually to the benefit of some corporate. I  argue that this is exactly what has taken place in Christchurch.

If self-regulation is to exist effectively, it requires strenuous and active accountability mechanisms. Changing the words of the Fair Insurance Code and ‘setting and forgetting’ is not a viable answer to the problems we have been experiencing. If there is no accountability in place – and it seems there is not,  then self-regulation is totally ineffective, unless there is some ulterior motive.

Certainly,   self-regulation has the potential to be more flexible and less costly for businesses and consumers than direct government involvement – but my bet is that if you were to ask most insurance affected Cantabrians they would rather pay a bit more in regulation costs than spend five years of their lives fighting for their entitlement under their insurance policies.

What we have experienced is totally ineffective and inefficient regulation, and completely inadequate compliance monitoring and enforcement. Interesting isn’t it that changes to the Fair Insurance Code come after the majority of the insurance profits have been made. The Fair Insurance Code could have been addressed three years ago!

Self-regulation after what we have just been through, lacks any credibility and has destroyed  a large degree of public confidence. It certainly shows a lack of effective enforceability. In my opinion it is fair to say that it has become subject to “regulatory capture” in that it only serves the interests of the self-regulator. It is merely a fair-weather regulation not capable of standing up to the real tough times. There remain massive conflicts of interest between the aims of industry members and self-regulatory objectives. But then of course the Government is fully aware of this fact.

For self- regulation to be effective, the New Zealand Insurance Council must be able to harness the common interest and enlist the support and input of other stakeholders such as relevant government agencies and consumer organisations, and manage the self-regulatory scheme transparently. I do not believe we have seen this happen. There should be regular and independent review for efficiency and effectiveness. This has not happened.

Community cynicism regarding both the government and the inability of the insurance industry regulating itself will undoubtedly have led to a distrust of self-regulatory schemes unless it can show itself to operate effectively, transparently and produce confidence amongst consumers. A  regulator is required to provide timely intervention where self-regulation is not working. This certainly has not happened in Christchurch.

Codes are not always the most appropriate response to a problem – the Fair Insurance Code has failed Cantabrians. A good regulatory outcome (whether legislated or self-regulated) is dependent upon the Government, industry and consumers being prepared to truly follow the rules  and thus adapt the regulatory structure.

I don’t see this as having happened. The Fair Insurance Code remains a nebulous ineffective document. Just another dodgy bit of window dressing by the industry.

Was it just a failure by a regulatory authority, overlooked by a Government department, or it was intentional support of corporates by the government?   Government departments don’t ‘overlook’ regulatory failures.  Ministers decide what will or won’t be done!

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

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.

‘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.

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

Happy New Year Folks, 2015 in review

The WordPress.com stats helper monkeys prepared a 2015 annual report for this blog. You helped to make it happen. I look forward to hearing more from you all in 2016.

Here’s an excerpt:

Madison Square Garden can seat 20,000 people for a concert. This blog was viewed about 64,000 times in 2015. If it were a concert at Madison Square Garden, it would take about 3 sold-out performances for that many people to see it.

Click here to see the complete report.

All the best in the New Year.

Sarah-Alice Miles

 

Fabulous Job Avaaz

For those of you not familiar with Avaaz it is a 42-million-person global campaign network that works to ensure that the views and values of the world’s people shape global decision-making. (“Avaaz” means “voice” or “song” in many languages.) Avaaz members live in every nation of the world; our team is spread across 18 countries on 6 continents and operates in 17 languages. Learn about some of Avaaz’s biggest campaigns here, or follow us on Facebook or Twitter.
To ensure that Avaaz messages reach your inbox, please add avaaz@avaaz.org to your address book.

Avaaz worked tirelessly to ensure that the Climate Change meeting in Paris was a success – follow the story here.

https://secure.avaaz.org/en/climate_story_loc/?bUuqLeb&v=70760&cl=9155429112

Be sure to fill this in….What’s your Experience

Despite the Insurance Council CEO, Tim Grafton’s recent comments, see http://www.newstalkzb.co.nz/news/national/call-for-cantabrian-tales-of-earthquake-insurance/  about the insurers being well aware of their strengths and weaknesses it is critical that we as an affected population make sure they fill out this survey so the results can be shared with the rest of the country and world. “It would be a surprise if it covered anything substantial that insurers were not already aware of” , says Tim Grafton.

I would also request of Michael Naylor (See http://www.stuff.co.nz/the-press/business/the-rebuild/74613075/worldfirst-research-into-insurance-industrys-quake-response)  that the question asking ‘how long it has taken to resolve your insurance claim’ be extended to reflect the true length of the delays people have sustained – the category ‘3 or more years’ does not adequately reflect the seriousness of the problems in Canterbury – please add a category ‘five or more years’. This will be the reality for still thousands of people.

www.quakesurvey.co.nz