EQC acted quickly after Feb quake to get reinsurance in place, has sufficient reserves, Finance Minister English says

EQC acted "fairly quickly" after the February 22 earthquake to get reinsurance back in place, and the organisation has sufficient reserves in its natural disaster fund if there are more costs to be met due to yesterday’s aftershocks in Christchurch, Finance Minister Bill English says.

The government would also be getting an update on troubled insurer AMI’s situation in the next day or two, English said.

In Question Time in Parliament today English said EQC was treating yesterday’s earthquakes as new events in terms of insurance purposes.

“We would expect there will be further claims on top of the number of claims already in excess of 400,000 since September last year,” English said.

“The EQC had reinsurance put in place from the first of June, so this earthquake is covered by their reinsurance arrangements,” he said.

Meanwhile English told journalists in Parliament before Question Time the government had not had any update on any increased costs to the economy due to yesterday’s earthquakes.

“The first impressions are that problems we already know might have got a bit worse. Places that had liquefaction before have got it worse again, and a bit more destruction in the central business district,” English said.

Asked whether the NZ$5.5 billion provisioned in the Budget for earthquake costs would be sufficient, English replied:

“Well we’ll just have to wait and see. It looked adequate before this earthquake. We’re working away on the major decisions that need to be made in Christchurch, and the cost was always a bit unpredictable, so we’re not anxious about it.”

“It was already [the case that] big expenditure had to be committed to Christchurch, maybe there’s a bit more with this earthquake. I think we’re all a bit more worried about the psychological impact on the people of Christchurch than the government’s budget,” English said.