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Sunday, April 24, 2011

ACC expects $200m quake bill

ACC expects $200m quake bill

Last updated 13:14 24/04/2011
Compensation and treatment costs for those injured in February's Christchurch earthquake are likely to leave ACC about $200 million out of pocket.

Figures released to the Sunday Star-Times by the Accident Compensation Corporation show it has received 7666 claims resulting from the magnitude 6.3 quake, the biggest single mass injury event in its 37-year history.

Although ACC has paid out only just over $2.5m to claimants to date, it expects the lifetime cost of claims resulting from the February 22 earthquake will be up to $200m.

Included in that $2.5m are $958,988 in death benefit grants and weekly compensation for those who lost loved ones. About 180 people were killed, including around 100 foreigners who were not covered by the ACC system.

The bulk of the injury claims are for soft tissue injuries (5242), cuts (1108), and fractures and dislocations (484). ACC has received two claims for trauma-induced hearing loss, 48 for burns, 63 for concussion, 131 for dental injuries, and 10 for hernias.

It has also paid money to seven people who lost limbs.

Providing medical treatment has so far cost nearly $800,000.

ACC's head of injury prevention and insurance products, Peter Wood, said that although the long-term costs to the corporation would be high, they were manageable.

"Obviously additional claims from the Christchurch earthquake will increase costs and ACC funding requirements," he said.

"However, the overall size of ACC allows for these increased costs to be absorbed with the current levies or funding structure without significant increases being required."

The costs had to be seen in the context of ACC's $16 billion in reserves and claims costs each year of more than $3b.

"It is therefore unlikely that the long-term cost of these claims will have an impact on ACC levy rates in the future."

The government has already taken steps to ensure that Christchurch employers are not penalised for the injuries their employees suffered.

ACC Minister Nick Smith has declared the quake an "adverse event", meaning it will not affect how much the city's employers pay in levies.

Under the new experience rating system, which came into effect on April 1, the levy a business pays will reflect its claims history in the previous three years.

But Smith said that penalising employers for an event that was clearly beyond their control would have been wrong.

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