Controversial state owned insurer Southern Response to be wound up by end of year

17:45 pm on 12 August 2019

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Plans to shut controversial earthquake insurer Southern Response by the end of the year has been met with concern and uncertainty.

Southern Response still has 379 open claims, and EQC minister Grant Robertson says it's now time to look at winding down the state-owned insurer, and moving any remaining claims elsewhere.

"At this point as the process begins to wind down it makes sense to look at the appropriate organisational arrangements. No final decisions have been made yet on those," he said in a prepared statement.

Sources have told Checkpoint that EQC is being explored as a possible destination for those claims.

But those who still have open claims with Southern Response are concerned things are about to get a whole lot harder.

For Christchurch homeowner Bob Burnett, it's been a long eight and half year journey trying to get his earthquake claim sorted.

He was surprised at the news of Southern Response's pending closure, as his claim could likely be one of 250-300 claims Southern Response will have on its books at the end of the year.

"[I'm] pretty shocked really, I knew nothing about that," he told Checkpoint.

"We're still waiting to have our insurance paid, there just seems to be unbelievable delays."

Mr Burnett said he was worried that if his claim was transferred to a new or different organisation that could cause new problems.

"It's frightening, that's not going to be good at all," he said.

"I just don't have any confidence in 'pass the parcel'...this has been the case all along with people coming and going and not getting up to speed.

"We really need people who know what they are doing."

That's a fear shared by Tom McBrearty - chair of both EQC's Claimants Reference Group and the Home Owners Advisory group for the Greater Christchurch Claims Resolution Service.

"The complexity of the claims in some of these cases is quite diverse, and the result of this is that some of these people have told their story several times over and may feel they have to repeat it all over again," he said.

He said the welfare of claimants needed to be top priority.

"They need to be looked after and looked after well."

The government has pumped about $1.5 billion into Southern Response after it was set up to take on earthquake claims from AMI, when it failed in 2012.

But it hasn't been smooth sailing.

Home owners have complained about delays in having their claims progressed. Southern Response was also accused of using controversial surveillance firm Thompson and Clark to spy on claimants.

In a statement today, Southern Response said it hoped the transition of claims would be as "smooth" as possible.

"Any new arrangement will retain all of Southern Response's responsibilities and liabilities to claimants," it said.

And in regards to Bob Burnett's claim, it said progress was made following site visits by Southern Response engineers and builders.

It said the next step is to finalise the scope of works and the repair methodology.

EQC minister Grant Robertson could not find time to speak to Checkpoint today - his office said no decision has yet been made about the next steps.

And those are decisions that claimants say are desperately needed now.