The research professor of commercial law at Southhampton University, England, said in an interview in Dunedin yesterday he had observed the extensive earthquake damage in Christchurch, and its effect on individuals and the wider community was "desperately sad".
Prof Merkin, who is also a Sir Eric Hotung Visiting Fellow at Canterbury University, said many insurance issues had yet to be resolved and 15 months after last year's February 22 quake, some residents were still having to use portable toilets.
He believed a dialogue should be started, including Government and insurance companies, on how a new model could be developed, potentially to replace or significantly change the role of the EQC.
The EQC had been set up for commendable reasons, and recent outcomes were "not their fault".
But the overall EQC structure was contributing to "problems", and given the huge scale of the post-earthquake challenges, the EQC model "just hasn't worked".
The $100,000-plus-GST payout from EQC to cover damage to land and houses in the case of domestic properties was no longer adequate, the EQC premiums were insufficient, and there had been many disputes involving the EQC and insurance companies.
The EQC also did not cover people who had no private house or contents insurance cover. Several alternative approaches could be considered for land and property insurance involving houses in the case of a major earthquake.
For example, private insurers could provide cover, but the state could provide guaranteed reinsurance, providing "state backup".
"The state says we have to take responsibility for this," he said.
And the state could, in turn, cover itself through international financial markets and further reinsurance.
In the United Kingdom, some private-sector insurers provided terrorism property cover, and the UK Government backed this up as the insurer of last resort.
• Prof Merkin, who is the author of several books on insurance, reinsurance and arbitration law, gave an open lecture on "The Christchurch Earthquakes: Insurance and Reinsurance Issues" at the University of Otago last night.
