EARTHQUAKE RISK

Evening Post, Volume CXXXVII, Issue 116, 18 May 1944, Page 4

EARTHQUAKE RISK

THE NATIONAL FUND

INFORMATION WANTED "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 regarding reinsurance of excess losses," said Mr. R. H. 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 Is 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 quake, it was obvious that the present state of the fund was not as strong as was desirable. It might well be that the rate of Is was too low. The fund, should be made as sound as possible. EXISTING POLICIES. "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 said. "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 pre-requisite to this is satisfactory reinsurance protection."