REPORT OF THE EARTHQUAKE AND WAR DAMAGE COMMISSION ESTABLISHED UNDER THE EARTHQUAKE AND WAR DAMAGE ACT, 1944, FOR THE YEAR ENDED 31st MARCH, 1950

Appendix to the Journals of the House of Representatives, 1950 Session I, B-11

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1950 NEW ZEALAND

REPORT OF THE EARTHQUAKE AND WAR DAMAGE COMMISSION ESTABLISHED UNDER THE EARTHQUAKE AND WAR DAMAGE ACT, 1944, FOR THE YEAR ENDED 31st MARCH, 1950

Presented to Both Houses of the General Assembly Pursuant to the Provisions of the Earthquake and War Damage Act, 1944

Wellington, Bth June, 1950. In accordance with tlie provisions of section 23 of the Earthquake and ar Damage Act, 1944, the following report, with a statement of accounts, is presented for the year ended 31st March, 1950 : # (1) The Commission records with regret, the death of Mr. Robert Caughley, C.8.E. ? a valued member of the Commission since its establishment in 1941. The Commission also lost the services of Mr. H. G. Wiley, whose membership dates from 1946 and who< resigned his appointment to reside in Australia. (2) The following is a comparative statement for the last four years of the operation of the Earthquake and War Damage Act. As from the Ist November, 1949, disaster insurance was included in the scheme for the first time :

Twelve Twelve Twelve Twelve Months Months Months Months. Ended 31st Ended 31st Ended 31st Ended 31st March, 1947. March, 1948. j March, 1949. March, 1950. Income — £ £ £ £ Premiums — (1) Earthquake and war damage 410,065 494,938 540,704 563,009 24,15& (2) Storm and flood from 1st November, 1949, Nil Nil Nil to 31st March, 1950 129,951 179,761 Interest 94,860 129,957 Outgo— Claims — (1) Earthquake and war damage 1,779 7,917 !> 00 2,16.1 6,606 (2) Storm and flood from 1st November, 1949, Nil Nil to 31st March, 1950 Salaries Other working-expenses Discount to insurance offices 2,162 2,166 9,965 2,493 1,410 11,843 2,643 1,665 13,573 2,382 1,044 14,947 Nil 739,78S Cost of exchange adjustment Surplus Total of Earthquake and War Damage Account Nil 488,853 Nil 601,232 339,525 300,013 5,328,081 5,929,313 6,229,326 Nil 0-797 6,952,292 16,822 0-583 Total of Disaster Account Nil Nil Ratio per cent, of working-expenses to premium 1 • 055 0-789 income exclusive of discount to insurance offices

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(3) Earthquake and War Damage Insurance.—Three hundred and six claims on the Fund were lodged during the year as compared with three hundred and forty-three claims in the previous year and four hundred and one in the year before that. Earthquake damage was claimed for in localities from Rot or ut a to Stewart Island, but, fortunately, there was no shock of a serious nature. Earthquake shocks which resulted in numerous claims are listed as follows :

(4) Storm and Flood Disaster Insurance. —The scheme for insurance against disastrous losses caused by storm and flood was instituted as a consequence of the Frankton Junction disaster in 1948 in order to afford some measure of financial relief to those whose property, already insured against earthquake and war damage, might suffer damage through storm and flood which "is of an abnormal and unforeseen nature and is of extraordinary and widespread effect." Finance is provided by crediting 10 per cent, of premiums collected under the compulsory provisions of section 14 to a s'pecial Disaster Fund, without further liability on the Earthquake and War Damage Fund, which carries its own heavy contingent liabilities and which will, in future, be credited with 10 per cent, less of premiums collected than in past years. The 10-per-cent. deduction represents the equivalent of l -2d. per cent, as the rate for extraordinary disaster cover. Necessarily limited though the cover is by the disaster definition as well as by the " franchise " or "first loss" deduction of 5 per cent, on insurances up to £3,000 and 10 per cent, on the excess of £3,000, many substantial claims have already been admitted in the five months the scheme has operated, thus providing an important alleviation of the financial loss which previously would have fallen wholly upon property-owners themselves. Disasters being completely unpredictable and not infrequent, it is impossible to judge whether the income of the fund, estimated for a full year at £56,000, will be adequate to meet claims as well as create desirable reserves to provide for the by no means remote possibility of a major disaster. Attention is drawn to the provision in the amending regulations empowering the Commission to issue cover to applicants on any class of property, against damage by storm and flood. In such cases, the Commission has authority to modify the limiting conditions applicable to extraordinary disaster insurance, on payment of a premium appropriate to the particular risk. (5) There have already been eighty-nine claims on the Disaster Fund, and of these sixty-one were received from persons suffering damage as the result of the Marton flood which occurred on the 13th February, 1950. (6) The total of the Earthquake and War Damage Account is now £6,952,292 Bs. 4d., and of the Disaster Account, after five months' operations, is £16,821 15s. 2d. (7) The Commission again records its appreciation of the competent assistance, given during the year, by the Secretary and his small staff. J. H. Jerram, Deputy Chairman.

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Date. Location. Modified Mercaili Scale Rating. Number of Claims. 27th May, 1949 Otago-Southland Force VI 54 8th January, 1950 Wellington Force V 30 13th January, 1950 .. Wellington Force IV 90 4th February, 1950 . . Wellington Force IV to V 11

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EARTHQUAKE AND WAR DAMAGE FUND (Under Earthquake and War Damage Act, 1944) Income and Expenditure Account of the Earthquake and War Damage Fund (Other Than the Disaster Fund) for the Year Ended 31st March, 1950 £ s. d. I £ s. d. Premiums, less returns and reinsurances .. .. 563,008 15 4 Claims paid and outstanding .. .. .. 2,161 2 7 Interest, including discount on purchase of investments .. 179,760 19 5 Salaries and overtime .. .. .. •• 2,292 16 2 Superannuation subsidy .. .. .. • • 41 13 6 Fees of Members of Commission .. .. .. 265 18 8 Expenses of management . . .. .. .. 699 6 1 Discount allowed to insurance offices .. .. .. 14,342 19 9 Balance transferred to Earthquake and War Damage Fund 722,965 18 0 £742,769 14 9 £742,769 14 9 DISASTER FUND (Under Earthquake and War Damage Regulations 1944, Amendment No. 2) Income and Expenditure Account for the Five Months Ended 31st March, 1950 £ s. d. £ s. d. Premiums, less returns .. .. • • • • 24,157 19 10 Claims paid and outstanding .. .. .. 6,605 8 5 Salaries and overtime .. .. .. .. 89 9 4 Superannuation subsidy .. .. .. .. 2 0 3 Fees of Members of Commission .. .. .. 12 18 10 Expenses of management .. .. .. .. 22 7 3 Discount allowed to insurance offices .. .. .. 604 0 7 Balance transferred to Disaster Fund .. .. 16,82115 2 £24,157~19~ 10 £24,157 19 10

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EARTHQUAKE AND WAR DAMAGE FUND— continued Balance-sheet as at 31st March, 1950 Liabilities J Assets Balance of Earthquake and War Dam- £ s. d. £ s. d. j £ s. d. £ s. d. age Fund as at 31st March, 1949 New Zealand Government stock .. 4,270,000 0 0 (excluding Disaster Fund) .. 6,229,326 10 4 Imperial Stock .. .. .. 2,440,000 0 0 Net earthquake and war damage —— 6,710,000 0 0 income for year ended 31st March, Cash in Public Account to credit of 1950 .. .. .. .. 722,965 18 0 Earthquake and War Damage Fund .. .. 125,453 18 10 Earthquake and War Damage Fund Interest accrued but not due . . . . .. 44,173 14 0 as at 31st March, 1950 (excluding Premiums accrued but not due .. .. .. 108,178 6 7 Disaster Fund) .. .. 6,952,292 8 4 Sundry debtors .. .. .. .. .. 59 12 0 Balance of Disaster Fund as at 31st March, 1949 Net Disaster Fund income for period ended 31st March, 1950 .. 16,821 15 2 Disaster Fund as at 31st March, 1950 16,821 15 2 Total Earthquake and War Damage Fund as at 31st March, 1950 .. .. .. 6,969,114 3 6 Claims outstanding .. .. .. .. 7,084 2 6 Discount due on accrued premiums. . .. .. 2,700 18 3 Premium and other deposits .. .. .. 8,966 7 2 £6,987,865 11 5 £6,987,865 11 5 Note.—In the balance-sheet New Zealand Government stock and Imperial stock have been included at par value. Bth June, 1950. T. L. Seator, Secretary. I hereby certify that the Income and Expenditure Accounts and Balance-sheet have been duly examined and compared with the relative books and documents submitted for audit, and correctly state the position as disclosed thereby.— J. P. Rutherford, Controller and Auditor-General.

Approximate Cost of Paper.—Preparation, not given; printing (1,334 copies), £lO 10s.

By Authority: !?. E. Owen, Government Printer, Wellington.— 1950,

frice 3d.]

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