The Government has ordered a review of the Earthquake Commission.
The Treasury-led review will look at the types of property the Earthquake Commission (EQC) insures, how it prices its insurance, and how it should be financed.
The review, which was foreshadowed last year, comes after EQC effectively ran out of money paying for the series of recent earthquakes in Canterbury.
The EQC's total liabilities from the Canterbury quakes are $12.2 billion, which exceeded its funds, making it dependent on a Crown guarantee for any big new quake.
Moreover, insurance levies when the first quake struck were not enough to meet the commission's operating costs - let alone pay for rebuilding Christchurch.
In late 2011, the Government increased those levies to try to address the problem and is now looking at EQC in more detail.
Earthquake Recovery Minister Gerry Brownlee says the review will look at the adequacy of the commission and how it can be improved.
"It's served us well, we're lucky to have had it. But, quite clearly, we've got to ask ourselves the question moving forward how quickly do you replenish the disaster fund and just exactly what level of cover for land particularly might exist in the future, as well as of course things like contents."
The commission's economic failure left the Government exposed to huge financial obligations in the event of another big shake and the review will look at this liability.
The review will also examine current rules limiting commission payouts to residential properties and capping those at $100,000.
It will not affect current dealings between the commission and people with damaged houses in Canterbury.
Too many bureaucrats - Labour
The Labour party is critical of the review group, saying there are too many bureaucrats involved.
The review team will include officials from the Reserve Bank; the EQC; the Ministry of Business, Innovation and Employment; and an independent expert.
One of Labour's Canterbury MPs, Clayton Cosgrove, welcomes the review, but says there should be a higher degree of independence on the panel.
Industry and other key stakeholders will be consulted, a public discussion document will be released in March, and law changes are expected later next year.