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Friday, March 6, 2015

A helpful change to the insurance disputes process coming up?

Yesterday Paul Goldsmith, Minister for Commerce and Consumer Affairs, announced  the opening of consultations on changes to the maximum amount that could be taken to the insurance industry’s disputes resolution services (the full media release is below).

The change proposed is an  “… increase to the cap on the compensation that dispute resolution schemes can award in relation to disputes about real property insurance claims. The proposed increase is from $200,000 to a minimum of $350,000.”

Post-earthquake, only disputes up to $200,000 could be considered by the insurers’ independent dispute resolution services. Beyond that amount disputes had to be taken to the High Court, an action too expensive for most people. Insurers could have agreed to have larger amounts considered, but this did not seem to happen. As a consequence many homeowners were, in effect, coerced by insurers into a take it or leave it situation. At the time there was significant demand for the cap to be raised.

The government’s proposal is in two parts. The first is to increase the maximum amount to at least $350,000. The second is to back-date eligibility for access to the amended amount to 2010, allowing those currently in dispute with their insurers to avoid the High Court process. Full details are in a document on the MBIE website here.

The submission process is relatively straight forward. MBIE require submitters to use a template (available on their website here). The document has a list of 15 questions they would like your answers to. Download it, fill it in, and e-mail it back to them.

If you think you might want to give it a go, but aren’t certain about the questions, give me a week or so to finish with the revised Fair Insurance Code and I will go through the submission questions.

Those wanting to make a submission have until 5.00pm on the 9th of April (Thursday after Easter) to make a submission to the Ministry of Business Industry and Employment. Information about the submission process is here.

 

Back to the Revised Code FAQ tomorrow.

Click the link to read the media release.

5 March, 2015

Consultation open for proposal to improve access to insurance dispute resolution schemes

Commerce and Consumer Affairs Minister Paul Goldsmith today announced the start of public consultation for a proposal to make dispute resolution schemes more accessible for homeowners in dispute over insurance claims.

“We are considering making dispute resolution schemes more accessible by increasing the compensation cap from $200,000 to $350,000 for property insurance disputes,” Mr Goldsmith says.

“Under this proposal, dispute resolution schemes will be able to consider cases where the insurer and the customer are seeking to resolve a claim discrepancy of up to $350,000.

“Currently disputes over $200,000 must be referred to the High Court, which many people may not be able to afford.”

“Dispute resolution is an independent, less formal and cheaper alternative to the Court system.”

“This proposed change would enable more effective and faster resolution of issues, and in particular should help move forward some of the unresolved disputes in Canterbury.

The public will have until 9 April to submit on the proposal, with any resulting increase in the compensation cap being made in mid-2015. Anyone with a dispute dating back to August 2010 will be able to take advantage of this change.

“The upcoming review of the Financial Advisers Act and Financial Service Providers Act will provide the opportunity to consider the role of the dispute resolution schemes and their jurisdiction more broadly,” Mr Goldsmith says.

For more information visit: http://www.med.govt.nz/business/business-law/current-business-law-work/approved-dispute-resolution-schemes-minimum-compensation-cap-for-insurance-disputes/

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