JUNE 2013
Preparations are continuing for the 2013 NZILA annual conference in Queenstown, on September 4 - 6.
Registrations went live on May 3, and already there has been a great response. If you are considering coming to the conference (irrespective of whether you ski or not), do not leave it too late to register. Registrations are limited due to the conference facilities available in Queenstown.
Informal discussions with those in New Zealand's industry suggest interest is great this year, partly because Queenstown is such an appealing destination. The conference organisers have already received interest from Australian delegates, with several indicating an intention to attend. That means registrations will be even more limited, so if you want to be at the NZILA annual conference, register now. The earlier you book your air travel, the better your airfares are likely to be.
Steigrad update
In April, New Zealand's highest court, the Supreme Court, granted leave to the directors to appeal against the Appeal Court's Bridgecorp decision. No date has been set yet for the appeal to be heard.
Apparently, the full bench of the NSW Appeal Court (including the NSW Chief Justice and the Appeal Court President) heard a similar case involving the rights to sue an insurer direct under a D&O policy in March. I understand the court has not yet made a decision. It will be interesting to see whether the Australian court follows the NZ Appeal Court's decision and, if it does not, why not.
But currently, doubts remain about a party’s right to sue an insurer under the NZ Law Reform Act 1936 and its Australian equivalents, both in New Zealand and Australia. Clarity will presumably be provided over the next year or so.
Discussion groups
The Insurance Council of New Zealand's newly appointed CEO Tim Grafton and Murray Chalmers, from engineering consultancy Beca, have spoken in Wellington and Auckland about insurance industry concerns and earthquake strengthening engineering issues.
Mr Grafton outlined his lack of insurance and legal background, and explaining how it set him up perfectly for the council's CEO position He explained the issues facing insurers in New Zealand and the audience soon realised he had quickly learnt about the challenges ahead. Discussion about continued involvement of the Earthquake Commission in a post-Christchurch insurance environment ensued and Mr Grafton's thoughts about how earthquake levies were best handled going forward.
He commented on proposed changes to NZ's fire service levies, which form part of insureds' insurance premiums. That means uninsured people do not pay the levy but still derive benefits from the fire service - a point of considerable contention. Mr Grafton concluded with some commentary on a little known parliamentary reform, which could be very significant to insurers in New Zealand.
Mr Chalmers discussed earthquake strengthening issues; many of which the insurance industry, among others, focused on following the Christchurch earthquakes. One issue was how to determine what percentage of New Building Standard (NBS) a building was before the quakes. Engineers routinely comment that a building is, for example, 34% NBS or 60% NBS, but Mr Chalmers explained that was by no means a "certain" figure.
Instead, it was the engineer's best assessment of what the NBS percentage was and therefore was open to challenge to at least some degree. That seemed to surprise many audience members who thought there was more "science" involved in attributing the percentage to a building.
Mr Chalmers discussed issues regarding how buildings were meant to react in earthquakes. He reminded the audience the building standards were about protecting life, not reducing damage to buildings. That led to a tension between protection of life and what insurers were after in terms of protection of property. Interestingly, Mr Chalmers concluded by comparing the likelihood of dying in a NZ earthquake with the risks of dying in a car or a workplace accident. Earthquakes were a far lesser risk.
Mr Grafton, Mr Chalmers and all in the insurance industry will watch developments, in what are interesting times, carefully.
