EARTHQUAKE RISK

Dominion, Volume 37, Issue 197, 18 May 1944, Page 4

EARTHQUAKE RISK

Operation Of National Indemnity Fund FULL INFORMATION SOUGHT “This chamber should ask the Government to let the public know’exactly how it is proposed to operate the national fund against earthquake disaster, and in particular what arrangements have been made about reinsurance against excess losses,” said Mr. R. 11. Nimmo at this week's meeting of the Wellington Chamber of Commerce. His report on the subject was unanimously adopted. Mr. Nimmo recalled that as from March 1 last the War Damage Act was extended to embrace indemnity for loss or damage from earthquake. As far as was known the funds available under the Act! for the payment of compensation to earthquake sufferers totalled about £4,000,000. The annual income at the new reduced rate of 1/- per cent, would be about £250,000, but it was highly probable that the whole of the annual income would have to be paid away to secure reinsurance protection against excess losses. Thus it would be seen that there would be no natural increase of any consequence in the funds available for compensation. When one thought’ of the likely damage should a large city be subjected to a quake of the intensity of the Murchison or Napier quakes, it was obvious that the present state of the fund was not ns strong as was desirable. It might well be that the rate of 1/- was too low. The fund should be made as sound as possible. “People are entitled to the facts to enable them to decide whether they should keep in force policies, against earthquake loss taken out with insurance companies, or whether to cancel those policies and rely on the protection secured under the new earthquake legislation,” Mr. Nimmo added. “It is a fact that many business men are not prepared to rely on the national fund, and prefer to keep their pre-existing policies in force. If it is possible for the Government to inspire public confidence in a sound national fund, so much the better; and as at least one State department—the Public . Trust—is urging people to drop their existing policies against earthquake in favour of the Government’s scheme, the duty of the Government is to air the matter.” “It is possible and desirable,” said Mr. N. S. Hunt, “for New Zealand to arrange a national earthquake pool on a sound basis, but a prerequisite to this is satisfactory reinsurance protection.”