Proposed Model: CIR-ACC (Climate Impact and Resilience – Accident Compensation Corporation framework)
Funding Structure: 40% Crown / 60% Levy-Funded | Actuarial Risk Model
May 2026
Paul Martin –paulm100m@gmail.com
Table of Contents
Executive Summary
Fund Architecture and Design Principles 4
Funding Model 5
Phase 1: Foundation and Legislative Development (2026-2027)
Phase 2: Parliamentary Process and Establishment (2027-2028)
Phase 3: Operational Launch and Pilot Programmes (2028-2029)
Phase 4: Full Operation and Integration (2029-2031)
Phase 5: Long-Term Maturity and Expansion (2031-2035+)
Governance Structure and Accountability
Local Government Access Framework
Risk Factors and Mitigation
Conclusion
Executive Summary
This document presents a comprehensive implementation timeline for establishing a National Climate Impact and Resilience Fund (CIR-ACC), modelled on New Zealand’s Accident Compensation Corporation (ACC) framework. The proposal originates from a District Council Annual Plan 2026/2027 submission, which identified the urgent need for a permanent, pre-funded mechanism to address climate-related infrastructure damage, managed retreat, and community resilience.
The current ad-hoc, post-disaster funding model leaves councils and ratepayers as insurers of last resort for climate volatility. The 2025 Tasman floods exposed the structural weaknesses in this approach, with fiscal shortfalls persisting despite central government co-funding. One-off funds are structurally incapable of keeping pace with the inevitable intensification and increased frequency of extreme weather events.
The ACC-type fund proposed here would operate as a mandatory, ring-fenced national mechanism, funded through a combination of levies on property insurance premiums, levies on commercial land value, and a fixed-ratio Crown contribution (40% Crown, 60% levy-funded). The fund would use an actuarial model where climate risk is annualised rather than capped per disaster, providing local government with predictable access to resources for both pre-emptive mitigation and post-event relief.
| Key Features of the Proposed CIR-ACC |
| ✓ Permanent, pre-funded mechanism replacing ad-hoc disaster bailouts✓ Actuarial risk model — climate risk annualised, not capped per event✓ Three funding streams: property insurance levy, commercial land value levy, Crown contribution✓ Dual purpose: pre-emptive mitigation AND post-event relief✓ Predictable access criteria for all local authorities✓ Independent governance with Crown, local government, and iwi/Maori representation |
Fund Architecture and Design Principles
Core Design Features
The CIR-ACC is designed around five core principles derived from the ACC model, adapted for climate risk management:
- Comprehensive Coverage: The fund covers all climate-related physical risks to public infrastructure, community assets, and household property, including gradual changes (sea-level rise, coastal erosion) and acute events (flooding, storms, wildfire).
- Community Responsibility: All property owners and commercial ratepayers contribute through established levy mechanisms, creating a broad risk pool that reduces individual burden and ensures equitable distribution of costs.
- Complete Rehabilitation: The fund covers not only emergency repair but also long-term resilience building, managed retreat, and ecological restoration — recognising that adaptation is a permanent condition, not a series of isolated responses.
- Administrative Efficiency: Predetermined eligibility criteria, standardised assessment protocols, and delegated decision-making authority enable rapid disbursement without sacrificing accountability.
- Actuarial Soundness: Premiums are set using climate risk modelling that annualises expected losses over long time horizons, ensuring the fund remains solvent as event frequency increases.
Funding Model
The proposed funding structure establishes three concurrent revenue streams:
| Revenue Stream | Mechanism | Estimated Annual Revenue |
| Property Insurance Levy | 2.5% levy on all domestic and commercial property insurance premiums; collected by insurers via RBNZ regulatory framework | $350-450M |
| Commercial Land Value Levy | 0.3% levy on commercial and industrial rateable land values; collected via council rating systems | $250-350M |
| Crown Contribution | 40% of actuarially assessed annual requirement; appropriated in Budget | $200-400M |
| Total Annual Fund | $800M-$1.2B |
This model generates an estimated base fund of $800 million to $1.2 billion annually, escalating with property value growth and insurance premium increases. The actuarial approach means funds are available immediately when events occur, eliminating the current delays associated with emergency appropriations and post-event negotiations between central and local government.
Phase 1: Foundation and Legislative Development (2026-2027)
Q3 2026 – Q4 2027 | Local government advocacy, policy development, and legislative drafting
Council Resolutions and Lobbying (Q3-Q4 2026)
The implementation begins at the local government level. Local, District and Regional Councils formally adopt resolutions calling for central government action. These resolutions specify the ACC-type model as the preferred mechanism and commit council resources to supporting the policy development process.
Council X Annual Plan 2026/2027 formally resolves to lobby for CIR-ACC legislation through Local Government New Zealand (LGNZ) and directly to the Minister for Emergency Management and the Minister for Climate Change
• Regional councils, unitary authorities, and metropolitan councils in high-risk areas (Northland, Hawke’s Bay, West Coast, Canterbury) adopt parallel resolutions
• LGNZ Climate Change and Emergency Management committees develop a consolidated national position paper endorsing the ACC-type mechanism
• Formal engagement with the Climate Change Commission to incorporate the fund proposal into the National Adaptation Framework
Policy Development and Stakeholder Engagement (Q1-Q3 2027)
Central government agencies, led by the National Emergency Management Agency (NEMA) and the Ministry for the Environment, establish an interdepartmental working group to develop detailed policy settings. This process involves extensive consultation with local government, iwi/Maori, the insurance sector, and climate adaptation experts.
• NEMA convenes the CIR-ACC Policy Working Group with representatives from Treasury, MfE, MBIE, DIA, and Te Puni Kokiri
• Reference group established including LGNZ, Insurance Council of New Zealand, Infrastructure Commission, and Climate Change Commission
• Iwi/Maori advisory panel convened to ensure Treaty-compliant governance structures and equitable access mechanisms
• Public consultation on high-level design principles, including levy rates, eligibility criteria, and governance arrangements
Legislative Drafting (Q2-Q4 2027)
The Parliamentary Counsel’s Office drafts the Climate Impact and Resilience Act, drawing on the ACC Act 2001, the Earthquake Commission Act 1993, and international precedents including the UK’s Flood Re and Australia’s proposed Cyclone Reinsurance Pool.
• Draft legislation prepared establishing the CIR-ACC as an independent Crown entity with statutory objectives and operational independence
• Levy collection mechanisms integrated with existing rating systems (via councils) and insurance regulatory frameworks (via RBNZ/FMA)
• Eligibility criteria and access protocols codified, drawing on the National Policy Statement for Natural Hazards 2025
• Governance framework established with independent board, Crown appointees, local government nominees, and iwi/Maori representation
| Period | Key Milestone |
| Jul 2026 | TDC Annual Plan adoption; formal resolution to lobby for CIR-ACC |
| Aug 2026 | LGNZ position paper development begins; regional council resolutions |
| Oct 2026 | Formal approaches to Ministers for Climate Change and Emergency Management |
| Feb 2027 | NEMA-led Policy Working Group convened; terms of reference agreed |
| Mar 2027 | Iwi/Maori advisory panel and sector reference groups established |
| May 2027 | Public consultation on design principles (8-week period) |
| Jul 2027 | Policy recommendations to Cabinet; legislative drafting instructions issued |
| Sep 2027 | Draft Climate Impact and Resilience Act completed |
| Nov 2027 | Cabinet approval to introduce legislation; Regulatory Impact Statement published |
Phase 2: Parliamentary Process and Establishment (2027-2028)
Q4 2027 – Q4 2028 | Legislative passage, entity establishment, and systems development
Parliamentary Process (Q4 2027 – Q3 2028)
The Climate Impact and Resilience Bill progresses through the full parliamentary process, including select committee scrutiny and public submissions. Given the cross-party consensus on climate adaptation evidenced in the National Adaptation Framework, the bill is treated as priority legislation.
• Bill introduced to Parliament with first reading debate (December 2027)
• Select committee inquiry with nationwide hearings (February-April 2028)
• Submissions received from all 78 local authorities, iwi entities, insurance sector, infrastructure providers, and community organisations
• Supplementary order papers addressing select committee recommendations (June 2028)
• Second and third readings; Royal Assent by September 2028
Entity Establishment (Q2-Q4 2028)
Concurrently with the legislative process, the new entity is incorporated and key appointments made to enable rapid operationalisation following Royal Assent.
• CIR-ACC incorporated as independent Crown entity (March 2028)
• Independent board appointed: 7 members including chair, with expertise in climate science, actuarial assessment, local government, infrastructure, Maori governance, and risk management
• Chief Executive recruited and appointed (May 2028)
• Initial office establishment in Wellington with regional liaison teams
• Memoranda of understanding executed with LGNZ, Insurance Council, EQC, and key government agencies
Systems and Capability Development (Q3-Q4 2028)
• Actuarial model development: partnership with ACC’s actuarial team and international reinsurance specialists
• Climate risk database integration: linking to NIWA, MfE hazard mapping, and council asset management systems
• IT systems procurement and development for levy collection, claims processing, and disbursement
• Staff recruitment: initial establishment of 45-60 FTE across actuarial, claims, governance, and regional liaison functions
• Eligibility criteria and assessment frameworks finalised for the three funding streams
| Period | Key Milestone |
| Dec 2027 | Climate Impact and Resilience Bill introduced; first reading |
| Mar 2028 | CIR-ACC entity incorporated; board appointment process begins |
| Apr 2028 | Select committee report back; board appointments confirmed |
| May 2028 | Chief Executive appointed; regional liaison structure established |
| Jun 2028 | Actuarial partnership and climate risk database integration begins |
| Jul 2028 | IT systems procurement; staff recruitment commences |
| Sep 2028 | Royal Assent; Climate Impact and Resilience Act 2028 commences |
| Oct 2028 | Regulations gazetted; levy rates set for 2029 financial year |
| Nov 2028 | Full operational readiness review; systems testing complete |
Phase 3: Operational Launch and Pilot Programmes (2028-2029)
Q4 2028 – Q4 2029 | Levy collection commences, pilot programmes activated, first disbursements
Levy Collection and Revenue Establishment (Q4 2028 – Q1 2029)
The first levy collection cycle begins on 1 January 2029, with initial revenue flows establishing the fund’s capital base. The levy mechanism is integrated with existing systems to minimise administrative burden.
• Property insurance premium levy (2.5%) collected via insurance companies on all domestic and commercial policies from 1 January 2029
• Commercial land value levy (0.3%) collected via council rating systems from 1 July 2029 (aligned with rating year)
• Crown contribution of 40% of forecast annual requirement appropriated in Budget 2029
• Initial capital base estimated at $400-500 million by 30 June 2029
Pilot Mitigation Programme (Q1-Q4 2029)
A $150 million pilot programme for pre-emptive mitigation is launched, targeting high-priority projects that demonstrate the fund’s value in reducing long-term liability.
• Round 1: Elevated bridges and critical infrastructure in flood-prone catchments ($60M)
• Round 2: Managed retreat buy-outs for properties in unsustainable coastal and flood-risk locations ($50M)
• Round 3: Wetland restoration and nature-based solutions for stormwater management ($40M)
Pilot Resilience Hub Programme (Q2-Q4 2029)
The community resilience hub stream supports development of solar+battery backup systems for emergency shelters and community facilities, building on the EPOD concept (Emergency Power Operating Devices).
• Grants programme for community resilience hub establishment ($30M pilot)
• Priority allocation to communities demonstrating high climate exposure and social vulnerability
• Integration with Civil Defence Emergency Management Group planning
• Technical standards and monitoring frameworks developed
| Period | Key Milestone |
| Jan 2029 | Insurance levy collection commences; first revenue flows |
| Feb 2029 | Pilot mitigation programme Round 1 opens (elevated infrastructure) |
| Mar 2029 | First claims protocol activated for qualifying events |
| Apr 2029 | Resilience hub pilot programme opens; regional liaison teams operational |
| May 2029 | Pilot mitigation Round 2 (managed retreat buy-outs) |
| Jul 2029 | Commercial land value levy collection commences via councils |
| Aug 2029 | Pilot mitigation Round 3 (wetland restoration); first resilience hub grants approved |
| Oct 2029 | Six-month operational review; levy compliance assessment |
| Dec 2029 | Annual report to Parliament; year-one actuarial valuation complete |
Phase 4: Full Operation and Integration (2029-2031)
Q1 2030 – Q4 2031 | Mature operations, full council access, actuarial refinement
Full Programme Rollout (2029/30 Financial Year)
With pilot learnings incorporated, the fund moves to full operational status. All three funding streams are available to all qualifying local authorities on a continuous basis.
• Mitigation programme: $300M annually for elevated infrastructure, managed retreat, nature-based solutions, and flood protection
• Relief programme: Event-triggered access for infrastructure repair, silt removal, temporary housing, and economic recovery (budget: $200-400M annually depending on event frequency)
• Resilience hub programme: $60M annually for community facility upgrades with solar+battery backup, water resilience, and emergency communications
• All 78 local authorities signed up with access protocols and pre-agreed assessment criteria
Actuarial Refinement and Levy Adjustment (2030-2031)
The first two full years of operational data enable actuarial refinement of levy rates, risk profiles, and funding allocations. The board conducts its first triennial levy review.
• Triennial actuarial review completed (June 2031); levy rates adjusted based on emerging claims experience
• Climate risk models updated with 2029-2031 event data and attribution science
• Regional risk weightings refined to ensure equitable access across diverse hazard profiles
• Investment strategy for fund reserves developed in partnership with NZ Super Fund / ACC Investment Management
Systems Integration (2030-2031)
• Full integration with council asset management systems for automated exposure assessment
• Real-time event monitoring linked to NIWA, GeoNet, and MetService data feeds
• Pre-approved project pipelines enable rapid disbursement (72-hour approval for pre-qualified projects)
• Annual resilience reporting integrated with council long-term plan and annual plan cycles
| Period | Key Milestone |
| Jan 2030 | Full mitigation programme opens ($300M); all councils eligible |
| Mar 2030 | First annual actuarial assessment; reserve adequacy review |
| Jul 2030 | First full year of dual levy collection; Crown contribution review |
| Sep 2030 | Integrated council asset management systems pilot (10 councils) |
| Dec 2030 | Two-year operational review; Parliamentary select committee briefing |
| Mar 2031 | Real-time event monitoring system operational |
| Jun 2031 | Triennial levy review completed; rates adjusted for FY2031/32 |
| Sep 2031 | Full council systems integration; pre-approved project pipeline active |
| Dec 2031 | Three-year actuarial valuation; investment strategy for reserves adopted |
Phase 5: Long-Term Maturity and Expansion (2031-2035+)
2032 onwards | Continuous improvement, expanded scope, international learning
Fund Maturity (2032-2035)
By 2032, the CIR-ACC is a mature, well-capitalised institution with established governance, proven operational systems, and strong actuarial foundations. The focus shifts to continuous improvement, scope refinement, and preparation for escalating climate impacts projected through mid-century.
• Projected fund balance of $2.5-3.5 billion by 2035, with annual levy revenue exceeding $1.2 billion
• Full actuarial cost-benefit data available demonstrating return on mitigation investment (target: 5:1 benefit-cost ratio for pre-emptive works)
• Managed retreat programme scaled to support 2,000-3,000 property acquisitions annually in high-risk zones
• Community resilience hub network reaches 300+ facilities nationwide
Scope Expansion and Adaptation (2033-2035+)
As climate science evolves and operational experience accumulates, the fund’s scope may expand to address emerging risks and opportunities identified through the six-yearly National Climate Change Risk Assessment cycle.
• Potential expansion to cover climate-related business interruption for SMEs in qualifying events
• Integration with biodiversity and ecological restoration objectives (blue carbon, catchment restoration)
• International reinsurance partnership to manage tail-risk events exceeding fund capacity
• Development of parametric insurance products for rapid disbursement in predictable event types
Legislative Review (2034)
The Climate Impact and Resilience Act 2028 includes a mandatory five-year legislative review. This review assesses the fund’s performance against statutory objectives, governance effectiveness, levy adequacy, and scope appropriateness.
• Independent review panel appointed by the Minister (Q1 2034)
• Public submissions on fund performance and future priorities (Q2 2034)
• Recommendations to Parliament for legislative amendments if required (Q4 2034)
• Second six-yearly National Climate Change Risk Assessment (2032) informs review scope
| Period | Key Milestone |
| 2032 | Fund matures; $2.5B+ balance; 5:1 mitigation benefit-cost demonstrated |
| 2033 | Scope expansion options assessed; business interruption pilot considered |
| 2034 | Mandatory five-year legislative review; independent panel appointed |
| 2035 | Amended legislation (if required); international reinsurance partnerships |
| 2036+ | Continuous adaptation to escalating risks; parametric products; blue carbon integration |
Governance Structure and Accountability
The CIR-ACC operates as an independent Crown entity with a governance structure designed to balance operational independence with public accountability:
| Element | Description |
| Legal Form | Independent Crown entity under the Crown Entities Act 2004, with specific provisions in the Climate Impact and Resilience Act 2028 |
| Board | 7 independent members with expertise in climate science, actuarial assessment, local government, infrastructure, Maori governance, and risk management |
| Crown Oversight | Responsible Ministers (Climate Change and Finance); monitoring under Crown Entities Act framework |
| Iwi/Maori Participation | Statutory board position; dedicated advisory committee; Treaty compliance audit function |
| Local Government Voice | Board position nominated by LGNZ; formal consultation on eligibility criteria and levy settings |
| Audit | Financial audit by Auditor-General; actuarial review by independent actuary; performance against statutory objectives |
The board comprises seven members appointed by the Governor-General on the recommendation of Ministers. Appointment criteria ensure expertise in climate science, actuarial assessment, local government, infrastructure delivery, Maori governance, community resilience, and financial management. Board members serve staggered four-year terms with one reappointment permitted.
An independent actuary reviews the fund’s solvency annually, with a full actuarial valuation every three years. The Auditor-General audits the fund’s financial statements and performance against statutory objectives. The fund reports annually to Parliament through the appropriate select committee.
Local Government Access Framework
All 78 local authorities (regional councils, unitary authorities, territorial authorities, and district health boards where relevant) have access to the CIR-ACC through three distinct pathways:
Stream 1: Pre-emptive Mitigation
Councils submit project proposals against predetermined eligibility criteria. Projects must demonstrate a positive benefit-cost ratio, alignment with district/regional climate adaptation plans, and deliver measurable risk reduction. Assessment criteria prioritise projects protecting critical infrastructure, reducing community vulnerability, and delivering co-benefits for biodiversity and water quality.
Stream 2: Post-Event Relief
Following a qualifying climate event (defined by intensity thresholds linked to NIWA and MetService data), affected councils activate the relief protocol. Pre-negotiated assessment contracts enable rapid damage evaluation, with 72-hour approval for pre-qualified response categories. The fund covers infrastructure repair, silt and debris removal, temporary accommodation, and economic recovery support for affected communities.
Stream 3: Community Resilience Hubs
The resilience hub stream provides capital grants for community facilities that can function as emergency shelters during infrastructure disruption. Eligible projects include solar+battery installations, water independence systems, emergency communications upgrades, and accessibility improvements. Priority allocation uses a vulnerability index combining climate exposure, social deprivation, and infrastructure dependency metrics.
| Stream | Annual Allocation | Eligible Activities |
| Pre-emptive Mitigation | $300M (base) | Elevated infrastructure, managed retreat, wetland restoration, flood protection, nature-based solutions |
| Post-Event Relief | $200-400M (variable) | Infrastructure repair, silt removal, temporary housing, economic recovery support |
| Community Resilience Hubs | $60M (base) | Solar+battery systems, water independence, emergency comms, accessibility upgrades |
Risk Factors and Mitigation
The successful establishment and operation of the CIR-ACC depends on managing several key risks:
| Risk Factor | Mitigation Strategy |
| Political discontinuity | Bipartisan support locked in through select committee process; statutory independence protects against ministerial interference |
| Levy resistance | Phased introduction starting at 50% of target rates; public education campaign; clear demonstration of benefit-cost advantage |
| Event frequency exceeding actuarial projections | Prudential capital buffer (target 120% of expected liabilities); reinsurance for tail risks; triennial levy review mechanism |
| Council capacity constraints | Regional liaison team support; simplified application processes for pre-qualified projects; technical assistance grants |
| Moral hazard | Co-funding requirements (minimum 20% council contribution for mitigation); benefit-cost thresholds; post-event accountability measures |
| Treaty compliance failures | Statutory Maori board position; independent Treaty compliance audit; iwi/Maori advisory committee with formal consultation rights |
Conclusion
The Climate Impact and Resilience Fund represents a structural transformation in how Aotearoa New Zealand finances climate adaptation. By replacing the current ad-hoc, post-disaster model with a permanent, pre-funded, actuarially sound mechanism, the CIR-ACC provides local government with the certainty and resources needed to plan for a future of intensifying climate risk.
The implementation timeline presented here — spanning from council resolutions in 2026 to full operational maturity by 2032 — is ambitious but achievable. It requires sustained political commitment, effective collaboration between central and local government, meaningful partnership with iwi/Maori, and public acceptance of the levy mechanisms that underpin the fund’s financial sustainability.
The cost of delay is substantial. Each year without a permanent fund locks in additional vulnerability, defers critical mitigation investments, and ensures that when the next major event strikes, communities and ratepayers will once again bear the full burden of recovery. The experience of New Zealand’s Tasman District in 2026 confirms that climate change is not a series of isolated emergencies — it is a permanent, intensifying condition. The CIR-ACC is the institutional response that permanence demands.
Climate Resilience Starts with Certainty, Not Crisis
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