Bernard Hickey examines the AMI Insurance rescue plan

New Zealand's government could face claims costs of as much as $1 billion though the scale remains unclear, Finance Minister Bill English said today, after announcing support of up to $500 million for AMI Insurance.

The Government has unveiled what it calls "a $500m back up financial support package" for AMI Insurance to give policyholders certainty and to "ensure an orderly rebuild of Christchurch in the aftermath of the two earthquakes."

Finance Minister Bill English said the support package would only be called on as a last resort if AMI's own reserves have been exhausted - "unless the Crown believes it is in the public interest to take control sooner."

It was possible the Government would have to double the package, should AMI find itself $1 billion short in meeting its claims.

"This support package will give AMI the time to seek a market solution to the challenges it faces as a result of the two Canterbury earthquakes," said English.

He said if other insurers wanted Government support, they would need to realise it would come at a hefty price.
In the case of AMI, it was a $15 million payment up front, and the risk of losing control and ownership of the company.

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[tovariszh]

And they can do so, having won an election, use the legal system to bend, manipulate and implement new laws. Who is asking where the financial sources come from? Obviously they are bought, some say borrowed, at a massive price (interest rates). And this price tag is paid BY US the people of this country.

[tovariszh]

How can they talk "bailout by the government"? Governments are elected and given political power by the the electors. Elections send people like you and me to the election booths to vote for more or less someone who we really don't know. The "government money" comes from the taxpayer as a government only governs certain steams and channels of incoming finances.

[goochtobyn]

Boo

[RoyStewart]

Booo let them eat cake !