Jim Daly (Cork South West, Fine Gael) | Oireachtas source

I thank the Chairman for the opportunity to contribute, as I am not a member of the committee. I welcome the delegation and its contribution at this debate and heretofore. I know many of the delegates from my constituency of Cork South-West.

I assume that people are aware of the intonation of the chairperson of the Revenue Commissioners, Ms Josephine Feehily, when she appeared at an Oireachtas committee recently and suggested that people who did not have flood insurance should refer to that when declaring the value of their homes for the property tax. We need to get this message out to people in flood-affected areas.

The witnesses might not be aware of this, but a letter issued to Cork County Council yesterday from the Irish Insurance Federation, IIF. I have a copy. In no uncertain terms, it outlined to councillors that, whereas insurers are obliged to insure where a liability may arise, they are not so obliged when a liability is a certainty. This is reasonable to a certain degree. In Clonakilty, the town that I am from, there were at least four flood events in the past 12 months. There is a reasonable certainty that some areas will flood in any given year. I tend to accept that the industry has no obligation where a liability is guaranteed to arise. Insurers work on a market basis and must make money.

We must deal with the reality. We are too quick to shove it all onto the insurers and to build them up as bad boys. We must broaden this debate and be more constructive. Where there is a guaranteed pay-out, of course they will not insure.

I have put a proposal to the Minister of State, Deputy Brian Hayes. I met him and some officials from the OPW three weeks ago. I asked him for an update on his negotiations with the IIF. They are not going in the direction that I would prefer. Where schemes have been completed by the OPW, insurance companies will re-instate insurance, but that is as far as they will go.

I do not see those talks or deliberations going any further, although that is only my assessment and I cannot confirm it as an absolute.

Recently I put a proposal before the Dáil that a solidarity levy should be applied to everybody. This would differ somewhat to Ms Powell's, being stronger. I believe her scheme has a number of flaws, is a bit complicated and difficult, short-term and unsustainable in the long term. The €8 million she referred to is now probably reduced to €7 million, or whatever, and from what I understand the Government is not going to put its hand into any particular pocket to put the money together. I take Ms Powell's point, made repeatedly, that it is not insurance as such but a fund to be made available to people. I believe there should be a scheme to give insurance to people who cannot get it and we should not dilly-dally about putting one in place. I outlined a proposal to the Minister at a meeting three weeks ago; he agreed to examine it and urged me to bring it to this committee meeting and put it on the record. In essence, I propose a solidarity levy that would be paid by every household that has insurance for those who have none. According to the IFF, 98% of households have insurance; 2% do not. If €20 per annum per household was applied it would generate in the region of €32 million per year. What would €32 million do? To put it in context, during the flooding events that happened in 2012, 627 households were affected which claimed €15 million, or less than 50% of the amount I propose be made available via a €20 levy. Would people pay that levy on their household insurance? It was suggested that I float the idea and I am using this opportunity to do so because we need to get reaction.

I believe that is how society is run and how we run our welfare system. Ms Powell began her presentation by saying there were those who have flood insurance and those who do not. I paraphrase. It is very simple. That is how the welfare and taxation systems work - people who have give to those who have not. That is how society has been run since Adam was a boy. It is not unfair or unreasonable to ask €20 per annum of people. That idea will have to be talked about if we are to be realistic about having the kind of funds we are seeking. I have been researching this area and I propose that the scheme be modelled like the Motor Bureau of Ireland's insurance scheme which covers uninsured drivers. If one is a victim of an accident that involves an uninsured driver one can claim from the motor bureau. How is that scheme funded? Everyone who has insurance pays a levy. Recently we all endured a levy on our health insurance in order to bail out the Quinn group. Everybody accepted that so I do not see why we should not have a scheme to bail out householders in their own homes, offering them the security that there is a fund there for them. However, it would have to be run alongside the insurance fund. I do not know if €5,000 could simply be allocated as a start-up for everybody. Claims would have to be assessed and everything would have to be done properly and in great detail. The precedent exists in the example of the Motor Bureau of Ireland insurance scheme. I will further my research on this to see if I can make a proposal mirroring that scheme.

During the past ten years approximately €700 million was claimed, or €70 million per annum. What I propose would bring in about half that amount, or €38 million. A considerable part of the €70 million per annum was for commercial claims which I do not believe should belong in the same equation. They should be dealt with separately. As an example, in the 2012 flood event, the entire pay-out was €54 million, of which €38 million went to the commercial claims of 487 businesses, while €15 million went to 627 households. I believe the sums add up and we need to move the debate further.

I thank the Chairman for his indulgence in allowing me to put all this on the record. I will further work on the proposal to see if I can have it implemented.