Inquiries (Public Inquiry into Earthquake Commission) Order 2018

Reprint as at 28 June 2019

Coat of Arms of New Zealand

Inquiries (Public Inquiry into Earthquake Commission) Order 2018

(LI 2018/225)

Patsy Reddy, Governor-General

Order in Council

At Wellington this 12th day of November 2018

Her Excellency the Governor-General in Council


Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

This order is administered by the Department of the Prime Minister and Cabinet.

This order is made under section 6(2) of the Inquiries Act 2013 on the advice and with the consent of the Executive Council.


1 Title

This order is the Inquiries (Public Inquiry into Earthquake Commission) Order 2018.

2 Commencement

This order comes into force on 16 November 2018.

3 Interpretation

In this order, unless the context otherwise requires,—

Canterbury earthquake events means any earthquakes in Canterbury on or after 4 September 2010, and includes any aftershock

claims outcomes includes—


cash settlement:


managed repairs:


the damage assessment process:


the scoping of repairs:


communication with owners:


timeliness of repairs:


the over-cap experience:


defective repairs and the process to investigate and resolve such repairs

Commission has the meaning given to that term in section 2(1) of the Earthquake Commission Act 1993

inquiry means the public inquiry established by this order

operational practices includes, in relation to the Commission,—


claims handling and management, including interactions with claimants, their advisers, and other insurers:


claims handling standards, including their implementation:


planning and resourcing (including litigation):


management structures and culture:


decision making:


capability and capacity:


procedures and processes:


services and systems.

4 Public inquiry

The Public Inquiry into the Earthquake Commission is established.

5 Matter of public importance

The matter of public importance that is the subject of the inquiry is the Commission’s operational practices, and its approaches to claims outcomes, in relation to the Canterbury earthquake events and subsequent natural disaster events.

6 Appointment of member

The Honourable Dame Silvia Rose Cartwright, PCNZM, DBE, QSO, DStJ is appointed the member of the inquiry.

7 Consideration of evidence by inquiry

The inquiry may begin considering evidence on or after 16 November 2018.

8 Terms of reference notified

The terms of reference for the inquiry are as set out the Schedule.

Schedule Terms of reference

cl 8

Background and status as a ‘matter of public importance’

The Commission is a Crown entity established under the Earthquake Commission Act 1993 (the Act). Originally established in 1945 as the Earthquake and War Damages Commission following the 1942 Wairarapa earthquake, the Commission’s role has changed significantly over time.

The Commission’s statutory functions are set out in section 5 of the Act. It—

  • provides natural disaster insurance for residential property (contents, dwellings, and some coverage of land):

  • administers the Natural Disaster Fund, including its investments and reinsurance:

  • funds research and education on natural disasters and ways of reducing their impact.

During 2010 and 2011, New Zealand experienced its most significant earthquake event sequence in recent times in the Canterbury region. This resulted in over 583,000 claims to the Commission for damage to approximately 168,000 residential dwellings. While the majority of claims have been addressed, multiple issues have arisen in relation to the Commission’s operational practices.

There are still approximately 3,000 unresolved residential property claims. These mainly relate to land claims or remedial repair claims, such as repair claims that have been reopened due to poor workmanship, incomplete repair scope, or damage not identified in initial assessments. These unresolved claims have a significant impact on affected Canterbury residents as well as on continued confidence, including of the global insurance market, in New Zealand’s ability to respond quickly and comprehensively to future natural disaster events.

Since the Canterbury earthquake events, the Commission has had to deal with a number of other events. These include—

  • the 2013 earthquakes in Seddon and the Cook Strait:

  • the Eketahuna earthquake in 2014:

  • the Edgecumbe flooding in 2017:

  • the November 2016 earthquake in the Kaikoura region.

The Commission’s practices have evolved in response to each of these events, with a significantly different approach taken in responding to the Kaikoura event. This saw a Memorandum of Understanding signed with insurers allowing them to act as the Commission’s agents in settling most building and contents claims. This different approach will provide a reference point for the inquiry, with its overall effectiveness not yet fully known.

Insurance, both public and private, makes a major contribution to the economic and social recovery from a natural disaster. The Commission plays a critical role in underpinning the New Zealand residential dwellings insurance market. As a result, the public needs to be confident that the Commission has the capability and systems to meet its key responsibilities. It is a matter of public importance that the Commission, the wider industry, and the Government learn from the experience of dealing with claims from the Canterbury earthquake events to help ensure that the Commission is well placed to deliver in the future.

Order of reference

The inquiry will investigate and report on the lessons that can be learned from the application of the Commission’s operational practices and the Commission’s approaches to claims outcomes in relation to the Canterbury earthquake events and subsequent events. It will make recommendations to improve the Commission’s readiness to respond to future events.

The inquiry’s purpose is to ensure that lessons are learnt from these past experiences and that the Commission has the appropriate policies and operating structures in place for improved operational practices in the future.

The inquiry’s scope includes the following:

Canterbury operational practice experiences
  • the Commission’s operational practices both before and after the Canterbury earthquake events, including the Commission’s performance in scaling up appropriate resourcing to deal with these significant events:

  • the Commission’s customers’ experience of its operational practices and claims outcomes:

  • the interplay between the Commission and the other insurers with regard to operational practices including, as relevant to the performance of the Commission, the experiences of those other insurers:

Comparative experiences
  • the benefits and shortcomings of the Commission’s different approaches to claims outcomes such as cash settlement versus repair and rebuild:

  • the Commission’s application of learnings from its Canterbury experience to subsequent events:

  • the key process differences between the operational processes used in Canterbury and the Kaikoura pilot approach, taking into account the different economic impact of the events:

Future strategies
  • operational practices that have now been put in place by the Commission, or which are being implemented, to help ensure improved experiences and outcomes:

  • any further improvements that can be made for any future events.

Inquiry matters requiring recommendations

The inquiry will make recommendations on—

  • lessons that can be learned from the Canterbury earthquake events and subsequent events relating to the management of operational practices. This should include contingency planning, preparedness, and the Commission’s responsiveness (and, as relevant to the Commission’s performance, the responsiveness of other insurers):

  • any changes or additions to operational practices as a result:

  • any other matter which the inquiry believes may promote improved operational practices for future events and/or minimise the recurrence of any inadequacies in claims handling identified by the inquiry.

Exclusions from the inquiry

The inquiry is not to investigate, determine, or report on, in an interim or final way, or otherwise prejudice, any of the following matters:

  • in accordance with section 11 of the Inquiries Act 2013, questions of civil, criminal, or disciplinary liability:

  • the structural arrangements for central or local government:

  • the Commission’s funding structure (including levies):

  • the resolution of actual claims that remain unresolved:

  • specific cases that are subject to current mediation, litigation, or arbitration proceedings:

  • the reopening of settled claims:

  • legal precedents (with regard to actual insurance claims) that have been established by the courts:

  • issues relating to insurance contract law, the Limitation Act 1950, the Limitation Act 2010, the Earthquake Commission Act 1993, other insurers, and reinsurers that are unrelated to the Commission’s claims management operational practices and claims outcomes.

Consideration of other investigations by the inquiry

The inquiry may take account of the outcome of any other investigations into related matters (including, for example, the Ministry of Business, Innovation, and Employment’s Review of Insurance Contract Law, which is considering whether there is a need for greater regulation of insurers’ conduct including claims management and handling, and the Report of the Independent Ministerial Advisor to the Minister Responsible for the Earthquake Commission).

However, the inquiry is not bound in any way by the conclusions or recommendations of any such investigation.


The inquiry is to report its findings and recommendations by 31 March 2020.

Schedule: amended, on 28 June 2019, by clause 4 of the Inquiries (Public Inquiry into Earthquake Commission) Amendment Order 2019 (LI 2019/141).

Rachel Hayward,
for the Clerk of the Executive Council.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 15 November 2018.

Reprints notes
1 General

This is a reprint of the Inquiries (Public Inquiry into Earthquake Commission) Order 2018 that incorporates all the amendments to that order as at the date of the last amendment to it.

2 Legal status

Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes

Editorial and format changes to reprints are made using the powers under sections 24 to 26 of the Legislation Act 2012. See also

4 Amendments incorporated in this reprint

Inquiries (Public Inquiry into Earthquake Commission) Amendment Order 2019 (LI 2019/141)