Geektastic: From Stuff:

“A settlement for Southern Response earthquake insurance policyholders could cost the Government $313 million if all of those eligible apply.”

It’s not going to cost “the government” anything at all. It’s going to cost those of us who pay net taxes. This sort of inaccuracy simply encourages wrong thinking about public expenditure.

Just like insurance companies should state very clearly when they pay out claims that the money isn't coming from some altruistic gesture by shareholders in the company, but from all their policyholders.  If they're "allowed to fail" despite achieving the highest possible rating from the world's most respected agency, and strict government prudential regulation overseen by a central bank which was supposed to provide surety that  it "couldn't happen", then that pretty much destroys faith in everything underpinning the insurance and finance industries as well as the entire property market.  If the answer to that serious problem is to restore faith in "the market" with a bailout, then spending the next 3-4 years lying and cheating policyholders out of what government committed to paying is eventually going to have consequences - unless you're living in a lawless banana republic.

The main omission in the story is that the "debt was incurred" dishonestly between 2011 and 2014.