Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

That is the kiss of death if ever there was one. I will be brief. I thank sincerely our witnesses for the effort they made to be here and for the work they have put into this over a prolonged period. It has to be acknowledged that they have brought the issue centre stage in terms of the political agenda. That in itself is an achievement and now we want to achieve progress and get the issue dealt with.

In advance of today's hearing the Oireachtas Library and Research Service produced a document which is a very good summary of all the different strands to this issue. We will share this with the witnesses. It has included a good table with the key statistics. I agree with the witnesses that it is about probing these statistics and asking the right questions, and that there is a need for independent validation. The first job that has to be done in any analysis is to validate the data. Mr. Jer Buckley and I would have discussed previously the estimate of the number of homes without any insurance policy. The Library and Research Service has the reference to it in this document. It comes from a Department of Finance report in 2010 which estimated that 33%, or 570,000, of households were estimated to have no household insurance. That is aside from the issue of flood cover. On Mr. Kavanagh's point, many people do not even know whether they have flood cover in their insurance policy. I would not know that. I would have to dig out the policy schedule, examine it and see if I have flood cover. I believe people would not know that. They may know in the areas affected because it would have been brought to their attention that they no longer have flood insurance cover.

The statistics from Insurance Ireland, which we need to probe, show that 98% of all household insurance policies have flood cover, which we touched on earlier, and that 83% of property insurance policies in areas which recently completed flood defences have cover, but that is those that have policies. There are many that do not have policies for a variety of reasons, but in some cases the reason would be that they cannot get flood cover and there is little point in having a policy. That has to be probed. Insurance Ireland says it is at 89% coverage where the defences are permanent and at 78% for demountables. It is even acknowledging that in areas where schemes have been completed and there are demountables, more than one in five of those in such areas who have a household insurance policy have not been given flood cover. It has acknowledged that even in its own statistics, which are not validated.

There is no information on the issue of excess, which is a key element in any insurance policy. We can quote these statistics about the percentage that have flood cover, but if one has to cover the first €2,000, €5,000 or €10,000 of one's policy, that raises serious questions about the value of that cover.

We have to bear in mind the consequences for people of having no flood cover. We spoke about households and for them it is largely piece of mind. If they are not going to be flooded again, not having insurance for it is a piece of mind issue, but it is more than that if they have to sell the property because a prospective purchaser will have to demonstrate to the bank from which he or she is borrowing that, before they get the mortgage, that they can take out an adequate insurance policy in respect of the property. That would include flood cover, certainly in areas where there has been a risk of flooding in the past. We spoke about the consequences for businesses, and it is a key issue for them. I know of a number who have no cover, not just flood cover but no cover at all, and who are taking a crazy risk because they are potentially liable, including when it comes to personal assets, homes and so on.

The key thrust of the Bill is what we have to bear in mind and section 3 is the meat of it, so to speak. It states that insurers cannot and shall not discriminate as between people and businesses in areas where schemes have been completed and in areas where there is no risk of flooding anyway. That is the key measure. They cannot discriminate on the question of, first, whether an insurance policy is offered and, second, on the price at which it is offered other than to the extent reasonably justified by the current risk profile associated with a property. That is a very fair presentation for the industry and one that should not be too onerous on it to comply with. The adjudicator on whether it would be reasonably justified is ultimately the ombudsman. Similarly, they cannot differentiate on the other terms either. That is a key point.

On Deputy O'Brien's comments about what Insurance Ireland representatives will tell us and what is in their opening statement in order that the witnesses know for the record, the key line, which is probably not altogether new but might signal some progress, is that they say they accept that at this early stage in their cycle, the OPW demountable defences appear to be performing well. They then go on to state the caveat about human intervention and cite the four instances in the United Kingdom where they claim there was a failure of demountables because of human intervention and so on. We will question them.

I should say to the witnesses that this Bill, before proceeding to Committee Stage, which is the next Stage, requires a money message from Government. I do not expect them to be aware of all the technicalities but the Ceann Comhairle has made a ruling, not just relating to this Bill but on a number of other Bills, that where the Bill potentially involves the expenditure of public money, which in this case is very modest and in respect of which the only additional expenditure is potentially extra resources for the Ombudsman to deal with cases, and given that there is a role for the Central Bank in the Bill, from which I assume the interpretation is that the Bill imposes potential additional costs, for the Bill to proceed, the Government has to provide a money message to this committee. That is a decision of Government so it is an issue on which we will press it.

I thank the witnesses again for their contributions and we will continue to work on this issue. The information they have armed us with and the practical information on the ground is extremely helpful. We will use it as best we can in the next session.