The State Services Commission is investigating whether a government-owned company may have breached integrity and conduct guidelines.
State Services Commissioner Peter Hughes said the inquiry would focus on Southern Response, a government-owned company responsible for settling claims by AMI insurance policyholders for Canterbury earthquake damage, and a security contractor it hired.
Newshub reported that Southern Response had employed private investigators to spy on claimants, gathering a variety of information on them.
Minister for Greater Christchurch Regeneration Megan Woods received information relating to the company and its use of a security contractor.
On February 16 she referred the matter to the State Services Commissioner for consideration.