Investment of the Natural Disaster Fund
Until 2001 the Natural Disaster Fund was invested in New Zealand fixed interest securities such as government stock.
In late 2001 there was an addition to EQC’s investment portfolio when, following a ministerial direction, the Commission started to invest in international equities. The objective of this move was to ensure the Commission holds assets outside the region that will be directly affected by a major natural disaster. The Commission has now completed the transfer of funds into global equities. Investment in equities is kept within a range of 27-33 percent of the Commission’s total portfolio.
The Earthquake Commission Amendment Act 1998 clarifies the powers of the Minister of Finance to direct EQC’s discretion in relation to its investment and reinsurance functions. This is to ensure that EQC’s exercise of these functions is consistent with the management of the Crown’s financial position.