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EQC short history - pre 2010

Over the years, the body now known as the Earthquake Commission has undergone several metamorphoses, indicated by its various changes of name.

EQC started life as the War Damage Commission, became the Earthquake and War Damage Commission and is now simply known as the Earthquake Commission or EQC.

The decision to cover earthquake risk as well as war damage, which led to the formation of the Earthquake and War Damage Commission, was taken because of a need laid bare by the Wairarapa earthquake of 1942.

Destroyed buildings in Masterton - 1942
Destroyed buildings in Masterton - 1942

Unlike war damage insurance, earthquake cover was voluntary at the time and, as a result, most property was uninsured.

Many buildings damaged in the quake had still not been repaired a year or so afterwards, largely because the owners couldn't afford to pay for repairs.

The existence of a substantial War Damage Fund brought a demand for its use.

In 1944, the Government passed legislation (the Earthquake and War Damage Act 1944) setting up the Earthquake and War Damage Commission. The Commission was founded on the principles of equity. Coverage was mandatory for all property insured against loss from fire, and all contributors paid the same amount, regardless of their individual risk. The new regime began operating in 1945 with the Minister of Finance as its nominal chairman and a fund of £4,089,268 (about $10 million).

From 1945 to 1988, the Commission operated to all intents and purposes as a branch of the State Insurance Office, collecting premiums and paying claims.

The general manager of State Insurance was an ex officio member of the Board. Management and staff were seconded from State Insurance, which also provided premises, administrative services, and extra staff to deal with large disasters.

Wellington state insurance office

Wellington State Insurance Office

The Commission's funds were part of the Public Account and The Treasury effectively managed its finances and investments. Over the next 40 years, the Commission was able to build up reserves based on modest premiums without having the fund wiped out by a large disaster, however that was coming.

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