It looks increasingly likely that the Kiwi taxpayer is going to have to bail out AMI Insurance in some way or another following the Christchurch earthquake. I think it’s important that those who have insurance with AMI are given certainty, so I support the government’s decision.
But it highlights the risks involved in another National government policy – the privatisation of ACC. Under National’s privatised model of accident cover (they try to dress it up by calling it ‘competition’ but it’s privatisation by any other name) a private accident insurance company, faced with an unforeseen influx of claims due to a disaster such as an earthquake, could find themselves in the same boat as AMI does now.
I asked Nick Smith in Parliament a few weeks ago whether or not the government would guarantee Kiwis that if their private ACC insurance provider collapsed they would still be covered. Naturally he evaded the issue. He had no choice really. If he’d said no, he’d basically be saying that privatisation would mean thousands of New Zealanders could find themselves without cover. If he’s said yes, he’d basically be writing a blank cheque to the insurance industry.
I think there are a lot of Kiwis who are getting pretty fed up with the government having to constantly bail out private companies who rack up massive profits when the going is good and then turn to the taxpayer for assistance when things get a bit tough. Why would we want to replicate the problem in ACC?