IAG's agreement to purchase AMI Insurance, announced today, will strengthen the Canterbury insurance market and reduce the Crown's liability, Finance Minister Bill English says. As part of the deal, the Crown will take over ownership of AMI Insurance’s Canterbury earthquake related claims.
"The part of AMI dealing with earthquake claims – along with its reinsurance for those events - will be retained as a new Crown company and will continue to manage AMI's customers' earthquake claims," Mr English says. This will ensure those claims are managed effectively and with the minimum of disruption.
"For earthquake affected AMI policyholders, this means their existing earthquake claims will be managed by the new Crown company, while the IAG group will manage their ongoing insurance cover. For AMI policyholders around New Zealand, the IAG group will manage their insurance cover."
The Government has appointed Nelson-based company director Ross Butler to chair the new Crown company. Mr Butler has a background in finance and insurance-related companies and is currently chairman of Nelson Marlborough Institute of Technology and deputy chairman of GNS Science.
The agreement is subject to regulatory approval, including from the Commerce Commission.
The media release includes information in a Q&A format. The following are selected from there:
Who will run the business that the Government is buying? Will it be part of CERA, the Treasury, or some other government department?
The business the Government is acquiring will be a Crown company listed in schedule 4 of the Public Finance Act. It will have its own board of directors and Nelson-based company director Ross Butler has agreed to chair the company.Mr Butler has experience in finance and insurance-related companies. He was chief executive of GIO Building Society and GIO Finance in Australia. He managed GIO through its privatisation, and subsequent establishment of banks and insurance companies throughout Australia, Asia and New Zealand. Mr Butler has extensive governance experience across multiple sectors. He is currently chairman of Nelson Marlborough Institute of Technology and deputy chairman of GNS Science.Will today's decision slow the process of getting post-quake results for AMI customers?
No, the claims department established by AMI following the earthquakes will transfer to the new Crown company.If someone has an AMI house policy today, and their house is either a substantial repair or a rebuild, who will they be dealing with once the purchase is completed?
The new Crown company, which will be taking over the management and settlement of earthquake claims.The last point seems possibly at variance with information published by AMI today (from the previous blog entry):What about the earthquake claim I have already lodged?
You won’t even notice the transition to the separate government-owned earthquake claims company. Your claim will continue to be processed by the same people who are working on it now.No doubt it will be sorted however, in the meantime:.Who do I contact – AMI or the separate government-owned earthquake claims company?
At this time please continue to contact us on 0800 100 200 for all your insurance needs. If you have an earthquake claim with AMI please continue to use the direct dial POD phone number provided to you until otherwise advised.