Michael McCarthy (Cork South West, Labour)
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We are now back in public session. Tá an cruinniú ar siúl arís agus táimíd i seisiún poiblí. We will proceed to discuss the difficulties in obtaining home insurance for properties in areas that have experienced extreme weather events with representatives form the Irish National Flood Forum. Is that agreed? Agreed.

Inniu, cuirim fáilte roimhMr. Enda O'Donovan, director and honorary secretary of the Irish National Flood Forum; Mr. Brendan Dempsey, Cork Society of St. Vincent de Paul; Ms Seosaimhín Ní Bheaglaoich, Dodder Flood Group; Ms Gillian Powell, Bandon Flood Group; Mr. Michael Thornhill, Skibbereen Flood Group; and Mr. Mick Tully, Ballinasloe Flood Group on behalf of the Irish National Flood Forum. Go raibh míle maith agaibh as teacht i láthair inniu.

I wish to draw your attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence you are to give this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise or make charges against any persons or entity by name or in such a way as to make him, her or it identifiable. The opening statement and other documents you have submitted to the committee will be published on the committee website this afternoon. Members are reminded of a long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses, or any official by name or in such a way as to make him or her identifiable.

The Irish National Flood Forum is a voluntary organisation representing the interests of local communities. These communities have suffered extensively from flooding and many thousands of people now find themselves in a situation in which they cannot insure their own homes. This is not acceptable, especially given the criteria that are now being used by insurance companies to assess the risk of flooding. If an area has flooded once, it now appears the whole area is condemned in perpetuity. No account seems to be taken of the location of individual houses or of the remedial works that have been successfully competed in that area. It now appears to be administratively easier for the insurance companies to blanket label an entire area or a jurisdiction as distinct from engaging meaningfully with people who have made significant efforts to correct what has gone wrong and not really assessing quotes individually, based on merit. That is a real issue for members of the committee and obviously a live issue for people who are affected.

I am delighted we have representatives from the Irish National Flood Forum and I hope we can tease out these issues and establish exactly the difficulties facing people who are at the coalface of this tragedy. This is one of a number of meetings we have had and we will have representatives from the Irish Insurance Federation before the committee in the coming weeks. We will reflect on the testimony of the witnesses who have come before us so that when we conclude our work, particularly the element of the committee that will engage with the Irish Insurance Federation, we can rely on the testimony of the various groups. This will inform how we interact with the Irish Insurance Federation.

I thank everybody, particularly those from my own bailiwick and people who have made long journeys to appear before the committee. This is really appreciated and their testimony will form part of our deliberation. I now call on Mr. O'Donovan to give his address.

Mr. Enda O'Donovan:

Mr. Chairman and Members of the Oireachtas, we thank you for inviting the Irish National Flood Forum to appear before you to brief you on our issues as home owners and communities affected by flooding.

The Irish National Flood Forum is a voluntary organisation comprising people and communities who have suffered from flooding and are at risk from flooding. In our presentation we will explain the situation as it at present for our members in their homes across the country. We will discuss the question of whether insurance providers in Ireland are acting as a cartel to increase their profits from the Irish market at the expense of Irish citizens and finally we will develop what we expect the elected Oireachtas Members to do for the citizens of Ireland.

We know that people whose homes have been flooded are already suffering in that they cannot get insurance and also that their homes are no longer mortgageable and their value has plummeted. The Chairman of the Revenue Commissioners, Ms Josephine Feehily, has confirmed to the Committee of Public Accounts at its meeting on Thursday, 21 February that flooding will impact on property tax valuations. We hope that the Revenue Commissioners, understanding of this issue will enable the OPW to get further funding to speed up the flood relief programmes across Ireland.

My colleagues will give many instances from Bandon, Cork, Dublin and Skibbereen where insurance providers are treating the public very badly. In a recent press release the Irish Brokers Association, after analysing and collating data from insurers, the Irish Insurance Federation and the Irish Brokers Association's own data from members across the country, has estimated that up to 50,000 households have no flood risk insurance or are at risk of losing flood risk cover across the Twenty-six Counties. The Irish Brokers Association observed the following in regard to the insurance providers, use of geo-coding: "Geo-coding, although handy for insurance companies is not accurate and can leave vast swathes uninsurable, despite no history of flooding in the area". It can also ignore remedial works which have been put in place by the OPW and local authorities rendering their areas far less prone to flooding. Even this committee understands this and is on record stating the practice of geo-coding of areas by insurance companies must be reviewed.

Furthermore, those who have a claim or lose or do not renew their cover will never get cover again under the current regime. The terms imposed by previous insurers must be declared to all future insurers. There must also be a question on the proposal forms which asks: "Are you in an area that has ever flooded or is there a history of flooding in the area or is your house situated within 500 metres of a river?".

While we acknowledge the work of the OPW in flood prevention measures which is by its nature slow, taking up to ten years from inception to completion, we the victims of flooding cannot wait for the OPW. As Dr. Juliana MacLeod, a principal clinical psychologist with the HSE South has stated, "The long-term issues and effects are influenced by both the sense of security (likelihood of an event happening again) and insurance issues. That is how important it is. It is as much a health issue as a financial issue".

It must now be asked if the insurance companies are acting as a cartel. We also ask why the insurance providers in Ireland whose head offices are across Europe and America treat the flooded public in Ireland differently from the public in their home countries. If one has a car crash or one's home burns to the ground, is one excluded from ever having insurance cover ? If one's neighbour has a car crash or a neighbour's home burns to the ground, is one excluded from ever having insurance cover? This is the case with flood insurance cover in Ireland. If one's neighbour has been flooded, no Irish insurance company will provide one with flood cover. A person is forever unable to obtain flood insurance cover. What is more surprising is that the insurance product providers seems to be singing from the same hymn sheet. It is supposed to be a competitive industry but they can all include the same exclusions safe in the knowledge that their competitors will also exclude the same thing. Can one think of any other industry in which every competitor will have a product that has the same exclusion clauses?

There is another reason to believe that all insurance providers are acting as a cartel.

No provider will even quote for home insurance if a person has made a claim in the previous five years. Thus there is no competition in the provision of insurance in Ireland. Can members of the committee think of any other business in Ireland where members of the public, who have mortgages, are required to buy home insurance but must buy that insurance at an inflated premium from a single provider? That is because the provider's so-called competitors refuse even to quote for the business for the next five years. A cartel is an explicit agreement among competing firms to fix prices or production. Cartels usually occur in an industry where there is a small number of sellers. The aim of such collusion is to increase individual members' profits by reducing competition.

We also attach the results of surveys which we have conducted in various locations. An unusual statistic compiled by the Irish Brokers Association, is that the majority of claimants who actually received a payment are usually unhappy with the level of support given by their insurance company. That means that people who have made a claim and received money are still unhappy with the way their insurance provider dealt with them.

Other statistics of note include that even though respondents have spent on average between €3,895 and €6,969 of their own money on flood mitigation measures, not one insurance provider asked about, or took account of, these measures when refusing flood cover. During a flood event, the public comes together to work for hours to protect property, mitigating any possible cost to insurance companies, yet it appears that the insurance companies would prefer if people did nothing.

We are encouraged that this committee understands this issue and has stated the objections. This was after the meeting last September with the insurance industry. I quote:

We have been told of instances where remedial work in terms of building or improved flood defences have been undertaken, and people in those areas still cannot get property insurance. This should not happen.

I wish to talk about what we expect from our elected Oireachtas Members. We ask legislators to help the 50,000 households, comprising approximately 250,000 citizens of this State, who are being bullied by the insurance industry. The industry in this State is acting as a cartel, not by fixing prices but by agreeing to exclude 50,000 homes to increase its profits. We ask members of this committee, as legislators, to show leadership, stand up for constituents and legislate for the insurance industry to abide by certain protocols, or by a certification process to enable households to avail of private home insurance cover which includes flood cover. At present, insurance providers in Ireland do not have to explain why they do not give cover, yet if one's home is mortgaged, one is required to pay for insurance which is weighted because of geo-profiling. We need legislators to insist that if hydrologists calculate that an area has a probability of flood return, then the insurance industry must be obliged to offer flood insurance cover.

For a low-risk area, which is one which has a chance of flooding recurring once in every 150 years or more, we require 100% flood cover. If there is a moderate risk, let us say a chance of flooding recurring once in every 75 to 150 years, then it is on an individual basis. If there is a significant risk of flooding, where there is a chance of flooding recurring more often than once in every 75 years, we can understand the insurance industry's problems. This basic protocol would be transparent and helpful to the insurance industry, the OPW and the public. We do not know where the current 5% Government levy on all insurance policies is going. Prior to the extra 2% being added for the Quinn legacy in January 2013, all policies paid a 3% levy which went straight to the Government for the past 15 years.

We are not asking for the insurance industry to subsidise flood relief works for the OPW, even when it is obvious that the industry would gain if it went into a public private partnership on flood relief schemes. However, we are asking the insurance industry to take responsibility to explain to the public why it has not accepted remedial works completed by the OPW that are helping to resolve flood risk in many areas. We are asking for a proportion of this 5% Government levy be set aside for a flood disaster fund - similar to the proposal of Mr. Brendan Dempsey of the Society of St. Vincent de Paul - for flood victims who want to purchase flood insurance cover but are excluded from doing so. I am providing the committee with a hand-out of a pilot scheme we intend to roll out. It would be a good scheme and we hope the committee will support it.

I wish to introduce my colleagues: Michael Thornhill, Skibbereen Floods Committee, Ms Gillian Powell, Bandon Community Flood Group, Mr. Brendan Dempsey, Cork president of the Society of St. Vincent de Paul, and Ms Seosaimhín Ní Bheaglaoich of the Dodder Community Group. Unfortunately, my colleagues, Mr. Joe Leahy from Clonmel and Mr. Mick Tully, have been unable to attend this meeting.

I thank Mr. Dempsey and his colleagues for their help with this proposal. I thank the committee members for their time and if they have any questions, I hope my colleagues will be able to answer them.

Michael McCarthy (Cork South West, Labour)
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I thank Mr. O'Donovan for a thorough and detailed submission. After such a presentation, nobody will be under any illusions about the difficulties involved. The insurance companies may tell us that everything is fine but what Mr. O'Donovan has outlined obviously stands to reason. Can he give us his own personal experience of those difficulties or experiences that were related to him, where no flexibility has been shown by insurance companies?

Mr. Enda O'Donovan:

I am in an area where I have been flooded twice since 2009. I was never flooded before that. The insurance industry did not even ask the reason for that flooding. I put in my flood defences and have tiled most of my ground floor. My neighbours have undertaken flood defence schemes and have used products to protect their homes. The local authority has done minor works to rectify things, including opening blocked drains, but the insurance industry has taken no account of this whatsoever. It just says that Mr. Enda O'Donovan of Glencurragh is not being included. Funnily enough, my parents, whose house overlooks my home, is about 150 ft. above my home and was never flooded, are also excluded from ever having flood insurance cover.

Michael McCarthy (Cork South West, Labour)
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Does that refer to the flooding in lower Glencurragh?

Mr. Enda O'Donovan:

It is just Skibbereen. They do geo-profiling and are picking areas. I can give an example concerning a gentleman I know in Fermoy. He lives high up on the hill over Fermoy. The OPW has completed its works on the north side of Fermoy. It has signed off on it and it is done, but insurance providers will not even contemplate giving flood cover. The insurance industry is not accepting the work the OPW has done. In the past year, people have phoned me from Dublin. They lived through the horrific events of October 2011, with catastrophic rainfall in a very short period. The probability of that type of rainfall returning is 1 in 350 or 1 in 400 years, but the insurance industry has withdrawn cover in that area. That means that a person cannot sell such a house. Anybody who wants to buy it cannot get a mortgage. The Society of Chartered Surveyors may say that the house is saleable, but it is not. It has hugely diminished in value because the only person who can buy it is someone who does not need a mortgage.

That is how serious this issue is nationwide. We derive something of a feel good factor from the Revenue Commissioners actually understanding this point and acknowledging that those who do not have flood insurance cover should mark that down on their property tax self-assessments because this is a huge issue. Moreover, one will find that 50,000 people will note this point on their self-assessment forms and while the insurance industry will state only 2% are not covered by insurance, that equates to 50,000 units.

Michael McCarthy (Cork South West, Labour)
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Has Mr. O'Donovan's group had engagement with the Revenue Commissioners on that section? It obviously is an issue that someone who cannot get flood cover is now expected to pay property tax, and difficult as that may be, it is particularly excruciating for those who cannot obtain such cover. Has Mr. O'Donovan's group had interaction with the Revenue Commissioners in this regard?

Mr. Enda O'Donovan:

We have asked Revenue for such interaction but have not received a direct response, other than the introduction of the aforementioned acknowledgement. Members may have noticed it was actually brought in within the past three weeks or month. It was first mentioned on 21 February when Josephine Feehily acknowledged the issue. It is encouraging that the Revenue Commissioners acknowledge what a big issue it is.

The Irish National Flood Forum has had discussions with the Minister of State with responsibility for the Office of Public Works, OPW, Deputy Brian Hayes. Moreover, we acknowledge the good work the OPW is doing. Its staff members are experts and include hydrologists and it is good with regard to flooding. However, for some reason, it has not been able to get anywhere with the insurance industry. This is the reason we make the point that all representatives of the insurance industry appear to be singing from the same hymn sheet in what ostensibly is a competitive industry. When the Irish Insurance Federation, IIF, next appears before this joint committee in a month's time or whatever, members will find its representatives are very good at saying "No" on behalf of the insurance industry. However, one will never find such representatives saying "Yes" on behalf of the industry. Instead, they will state it is an individual decision for each insurance provider. It would be helpful were the IIF a sufficiently strong body that actually represented and could speak for the insurance industry. However, its representatives do not and it is a divide and conquer situation, using the IIF. It cannot speak for the Irish insurance industry because were one to ask a question of it, its response would be the matter in question was a decision for each individual provider. This is another huge problem because getting protocols in place means that at present, one must deal with all the providers rather than one body, which makes matters more difficult.

Michael McCarthy (Cork South West, Labour)
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We will proceed to questions and answers in which the discussion will go back and forth. Does Mr. Dempsey wish to make a contribution?

Mr. Brendan Dempsey:

I would love to. As a charity, the Society of St. Vincent de Paul has been having huge trouble with the insurance industry. The insurance industry used to be run by gentlemen who were fair, decent and honest, but this has changed. The industry has gone from being equitable to being highly adversarial and people are being put under huge pressure to accept offers made by the insurance company. For example, since 2009, the Society of St. Vincent de Paul has spent more than €1.8 million nationwide in dealing with direct building and repair of houses. We spent approximately €408,000 of that in Cork. A considerable portion of the problems pertains to the retention of claims, that is, of money, whereby the insurance companies can hold back up to 30%.

I will provide an example of a woman named Julie who lives out on the Carrigrohane Road. Her house was flooded and the cheapest of three quotations she got came to €180,000. However, she ended up being offered and being obliged to accept €80,000, that is, half of the money her builder needed to do the job. What did Julie do? She got most of the work done on the black market, which means you guys in the Oireachtas do not get tax. The job was done cheaply and extremely shoddily. We know this because for the past two years we have been repairing her house. The problem for Julie is that because she got it done on the black market, she does not have documentation or receipts for the work done. Therefore, the insurance will not pay out the retention money. We reckon the insurance industry must be keeping back millions of euro every year in additional profits because the companies are not obliged to pay out.

Another big problem we have in Cork, is that approximately one fifth of Cork city is unsellable at present. One cannot buy or sell because one cannot get a mortgage. One cannot get a mortgage because one cannot get insurance. In the fortnight following the night in 2009 when Cork was flooded, I reckon I walked approximately 80 km around the streets of Cork and up the valley up to the Inniscarra dam. In the hundreds of houses I visited, I only met one person who was satisfied with his insurance claim. It turned out that he was in the building industry in a small way himself and knew how to deal with it. He explained the process to me. He needed €80,000 to do the work and so claimed €180,000. The insurance assessor came out and had a great time knocking him back and was thrilled with himself to be doing his job. The claimant told me he finally ended up with approximately €3,000 more than he needed to do the job. He was the only person I met who came out of it well.

Most of the clients we meet, be they little old ladies and gentlemen or families, are extremely decent people. They are honest to a tee and put in precisely what it costs to do a job. However, when the insurance assessor arrives, his or her job is to knock the claim back. Consequently, the claimants end up with a shortfall of many thousands of euro. In the recent flooding that took place in Glanmire in Cork, in a single area of 42 houses, the shortfall between what insurance paid out and what the builder required ranged from €1,000 to €17,000. That meant that people were obliged to approach credit unions, banks and neighbours as well as the Society of St. Vincent de Paul, as we helped out a lot of people there. However, some of them are going to moneylenders.

In the case of one little old lady up on Washington Street, just above Jury's Hotel, the flooding hit her house and rose 3 in. above her cooker and fridge. When the flooding receded, she waited a week before returning, after which she switched things on and they worked. The cooker worked, amazingly enough. The assessor came and, being highly honest, she explained the cooker was now working and that perhaps she should not claim for it. The assessor agreed with her and six months later, we were obliged to buy a cooker for her because it shorted out. The lady could easily have been electrocuted.

A guy in Henry Street in Cork, who came back from holidays on the night of the flooding, put in a claim. While he was left €5,000 short, the main problem he encountered was that his insurance policy expired three days after the flooding and he was obliged to renew. The company would not give him cover and he could not go to anyone else. He tried but no one else would give cover. For three months, the company held him without any insurance cover. Had a slate fallen from his roof and hit someone, he would have had no public liability. Eventually, after a long argument, they settled. They would not pay him the retention because he did not have all of the documentation the company required in terms of receipts. He threatened to go to law with the company, after which it made a decision.

He was a special case and they paid him. I have hundreds of individual cases and stories I could talk about. I do not know whether that is any good to the committee in terms of what it wants.

Michael McCarthy (Cork South West, Labour)
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It will all form part of our deliberations. What has been said will be of benefit to us, in particular the case of the lady with the cooker and the person who came back from holidays.

Mr. Brendan Dempsey:

I would like the committee to hear one more story. It relates to a lady who was refused flood cover. They told her that she was not covered even though she had insurance. The reason was that they discovered that she had not ticked the box that said she had made a previous claim. She had made a small claim 18 years previously but because she did not tick the box to say that, therefore, as far as the insurance companies were concerned, she had made a false declaration and she has no cover. I would not ask the same lady to book a train ticket to Dublin. She is not capable of doing it.

We have discovered what happens if one goes home in the morning to find that the insurance company has sent a bill for insurance for the next year, and if one decides with one’s wife that it looks high and one will shop around. One would try four or five different insurance companies, some of which might perhaps be dearer. One of them might say “No, we are not interested”. One might then decide, with one’s wife, to stay with the existing company, which is not that bad, and go ahead and pay the money so that one is insured. What one does not realise is that the insurance company that refused to provide a quote is refusing one cover. They go diddly, diddly on a little machine and enter one’s name and address into a central statistical log for all insurance companies. They have refused to provide cover and if, any time after that, one makes a claim, the first thing one’s insurance company will do is to see whether one has been refused insurance and there it is in front of them. Accordingly, one has made a false declaration and one is not insured. That is despicable because people are not able to deal with such technology. For example, at the moment one of the big companies, Allianz - a very good company - is offering cheap insurance. It is advertising the fact on television at the moment, but one can only book it online. One cannot get it from a broker. I am nearly 70. Someone like me could not go online to get it. I do not know how to do that. If I attempted it I would probably make a hash of it and I would find that when push came to shove, I was not covered. Insurance companies are treating people in a despicable way.

Ms Gillian Powell:

I am coming at it from a human perspective. In many ways the world is divided into people who have been flooded and those who have not. To set the scene, I would like members to imagine that when they go home this evening that as they are about to turn on their light in the kitchen they are wading through 4 ft. of water, because that is the reality. Then their lights go out and they have no electricity.

In researching for today’s meeting I discovered that in 2001 at the National Hydrology Seminar, lecturers Michael Bruen and Fasil Gebre made a special plea that the special problems of flood insurance in Ireland would be recognised and addressed. That was at an OPW hydrology forum 12 years ago, yet nothing has been done. What that means for people like us and thousands of others in Bandon and many other places around the country – more than 400 places – is huge anxiety. It is difficult to communicate the deep frustration at the lack of action.

In the final analysis, if people like us are flooded again we will be reliant on the Society of St. Vincent de Paul or the kindness of our neighbours. In 2009, many small businesses such as mine and others in Bandon and Skibbereen had reserves but now we do not, nor do we have any insurance. Other countries do not do things like this. We are one of the few countries who do nothing at all for people who are flooded. There is no catastrophic cover and very little help is provided by any agency, apart from the kindness of neighbours and the Society of St. Vincent de Paul.

From my perspective and that of many others, inaction is not an option. I hope the committee will look on the issue as a political opportunity to do the right thing. There has been basic neglect over the years but it is on the desk of the new guys now. The committee is great. It will help us. I hope something good will come out of it. The committee could use this opportunity and the pilot proposal on which Mr. O’Donovan will elaborate now to provide a basic catastrophic cover for Irish people. Under the European Convention on Human Rights, everyone has a right to shelter. Therefore, it is the committee’s duty to ensure that when someone’s home is destroyed that there are mechanisms in place to restore them and our livelihood quickly. None of us wants to be reliant on the State. We want to get on and do our business and keep this country going. That is what we do in our day jobs. It is usually done with insurance. If people have an up or a down in their lives they have insurance but when one does not have it, something must be done. Many people ask me every day when I walk up the town to run for election as a flood candidate. That reflects the huge concern people have that they will be flooded again. Unfortunately, the concern is backed up by science with global warming and other factors. It is time to show leadership, bite the bullet and do something. The committee will gain the gratitude of thousands of what I could call floating voters whose main concern is survival in the face of a flood catastrophe.

Ms Seosaimhín Ní Bheaglaoich:

Seosaimhín Ní Bheaglaoich is ainm domsa. An bhfuil Gaeilge agaibh anseo?

Michael McCarthy (Cork South West, Labour)
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Beagáinín.

Ms Seosaimhín Ní Bheaglaoich:

An dtuigeann sibh mé? Níl córas aistriúcháin, an bhfuil?

Michael McCarthy (Cork South West, Labour)
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Níl.

Ms Seosaimhín Ní Bheaglaoich:

Seosaimhín Ní Bheaglaoich is my name. I live in Dodder View Cottages in Ballsbridge. I am here on behalf of the residents of Dodder View, Ballsbridge Avenue and Beatty’s Avenue. We were extensively flooded in October 2011. People lost their lives during the flood, but not in Ballsbridge. A nurse died in Ranelagh and a garda in County Wicklow who was trying to divert people from a swollen river. I was in the same place in 1986 when Hurricane Charley hit. I got insurance that time from whatever company I was with. I lost my house and my car, and so did all my neighbours. Many of us were out of our homes for six months. There was the trauma of losing one’s home and one’s transport but the biggest trauma of all was dealing with the insurance companies. They were absolutely appalling. They inferred that I was a serial claimant; that it was my fault that the flood came in and ruined my house and car. They doubled my premium and refused flood cover. As a previous speaker said, one shops around and other companies say “No” and do not touch one so one has to stay with the insurance company one was with. I had a Jeep that I had bought a couple of years previously for €22,000. They gave me €7,000 for it after I had fought them for weeks. They were absolutely appalling. Everybody is in the same situation. We look at the Dodder every day and pray to Buddha or whoever is up there to help to make sure the flood does not come in again up our stairs. We have been promised by Dublin City Council and the OPW that they will build a flood wall. Some of the wall has been built down near the posh apartments but the red brick cottages in Ballsbridge are still waiting for the wall, which is dependent on planning permission. We were promised that something would be done at the beginning of the year but nothing has been done.

We quake in our boots and look at our daughter and pray every night before going to sleep. On top of everything that has happened, the Revenue is valuing our houses for property tax purposes at either €650,000 or €700,000. If they were to offer us this sum for our homes, we would all take it and leave. That is all I can say.

Mr. Michael Thornhill:

Mr. O'Donovan will outline the details of the proposed pilot scheme.

Mr. Enda O'Donovan:

The Office of Public Works is the expert on flooding. As I stated, it takes a long time - more than ten years - for flood measures to be implemented. We cannot wait that long because we do not have resources and could not survive another flood event. When heavy rain is due, we are all up at night because we do not have insurance cover. The stress is unbelievable. It needs to be experienced to be believed. For these reasons, we want a pilot scheme introduced. We have examined various options and propose a scheme that would help people get back on their feet. I am not referring to insurance but a means to allow people to find their feet. We are seeking enough recompense to allow people to continue to live in a damp house after a flood event.

I will read through the details to give members an idea of what the scheme entails. We propose the establishment of a trust fund for a flood event to help those who do not have flood insurance cover. The fund would only provide a limited payment per home, one which would cover basics and allow people to get back on their feet. We propose a maximum payment of €5,000 per home. This modest sum would cover the cost of replacing a refrigerator, washing machine, cooker, beds and clothes, thus allowing people to return to their homes after a flooding event. It is vital to allow people to do so. We are seeking a minor investment from the Government, rather than additional money. In 2009, a sum of €10 million was promised for flood relief for a catastrophe fund. As far as we can ascertain, only €1.8 million of this funding has been spent. We are simply seeking to have the remaining €8 million paid to an agency such as the National Treasury Management Agency, NTMA, and ring-fenced for this purpose. Sponsorship provided by non-governmental organisations could increase the fund and members of the public would pay to join. We propose a membership fee of €10 per month in addition to what people pay for home insurance policies that do not provide flood cover.

We are not asking for something for nothing. People would buy into the fund in return for being provided with a safety net. I have provided some figures, which show the initial investment to be allocated to the NTMA. We have experts associated with the insurance industry who would help manage the fund. Based on an estimate of 10,000 households buying into the fund, we envisage we could pay out on events every year without exhausting the fund. The important element is that a levy would be applied to the insurance industry. This levy would be only €2 per annum for each home insured. Based on a figure of 1.8 million homes, this would generate a sum of €3.6 million per annum. This funding would be vital if the trust fund is to save people. It is one proposal. We are trying to find solutions as we cannot wait for flood relief schemes which take ten years to complete. People cannot wait this long because they do not have anything and cannot afford another flood.

Mr. Brendan Dempsey:

The Society of St. Vincent de Paul cannot afford another flood either. We have spent €1.8 million on flooding since 2009 and we have a severe call on our funds for other things, as the Chairman can imagine. I may not have emphasised this point but where insurance companies will retain moneys until a job has been completed and receipts produced, this means the owner of the house must find the money to have the job done. Many of the clients we deal with are not in a position to do this because they may have to come up with €20,000 or €30,000. It is appalling that people who have insurance are required to find money first and subsequently seek reimbursement from their insurance company.

Ms Gillian Powell:

When people read our proposal, they may say the €8 million we are seeking is Exchequer funding. Catastrophic flooding already costs the Exchequer if those affected do not have insurance. For example, the Minister for Social Protection, Deputy Joan Burton, visited Clonakilty to provide funding. Flooding comes at a high cost to the economy.

Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank the representatives of the various organisations before us. Mr. Dempsey is correct that the Society of St. Vincent de Paul cannot deal with a catastrophe of this scale on a regular basis. I understand the OPW flood relief funding can only be used if water enters a house through a front door. Ms Powell would not have any problem qualifying on that front.

Last year, a sizeable amount of the allocation for flood relief was not spent. As I recall, the relevant Minister indicated to me in reply to a parliamentary question that more than €7 million was not spent last year. Is the delegation and are local authorities in the relevant areas aware of this? Unless one fixes a leaking pipe, one will have to mop up the floor all day. It is easier to fix the leak.

I do not wish to simplify this issue because many towns are built on flood plains and easy solutions are not always available. There is no doubt that Ireland is experiencing more severe weather events than previously, with huge amounts of rainfall now common within a matter of an hour or over several hours. Much more could be done in terms of flood relief works. An example was provided by Deputy Denis Naughten recently when he noted in the case of the Shannon flood plain that a bog could be used for attenuation purposes to take some of the surplus water for a number of days. Such imaginative proposals must be considered.

I am interested in the proposed scheme. It is easy to identify the problems and I know it has been painful for the witnesses to outline their experience of flooding. It is great that they have also produced a solution in the form of the proposed pilot scheme. What evidence do they have of the existence of an insurance cartel? This would be a serious matter if it were found to be true. I do not doubt the passion with which the witnesses have made their case and expressed their concerns. The State cannot sail along and hope the Society of St. Vincent de Paul will pick up the tab as to do so would not be practicable. As a householder in an area that does not flood, I would be happy to pay €2 or €20 each year to show solidarity with people in the areas affected by flooding.

Mr. O'Donovan, in his graphic description, noted that his parents' house was located on ground 100 ft. above his own house.

Throughout the country, it is often brought to our attention that an area is damned if there is a house flooded in it. It does not matter how high the other houses are. A town with a row of houses on a steep decline to a river that may not have flooded since the time of Noah's ark and which will never be flooded again may be blacklisted because of its being in a certain electoral division. Has any progress been made with representatives of the Irish Insurance Federation or insurance industry on this serious matter?

What is the position on insurance and evidence of cartels? With regard to the scheme, a version of the one I mentioned would be very worthwhile. It is good to see the delegates coming forward with proposals. The other issue concerns the OPW and local authorities.

Mr. Enda O'Donovan:

I will answer in two parts. Our main issue with the OPW, which comprises a huge problem that the Minister of State, Deputy Brian Hayes, must take on, is time slippage. Every single community across the country could point to the amount of time slippage associated with employing consultants, etc. Let me give an example from my hometown, Skibbereen. We were flooded twice in 2009, in November and December. The Minister of State's office opted for another consultant's report on Skibbereen. The letter to this effect, issued in April 2010, states the Minister hoped to have the result by December 2010. The consultants were appointed to produce the report 12 months later. Therefore, the game plan was already a year behind. Every part of the report has been subject to delays, be they for four months, six months or 12 months. Instead of being a year behind schedule, the process is now probably two years behind. Ms Powell can give an example of something that had nothing to do with the flood relief scheme delaying an aspect of her project. My main issue with the OPW is time slippage and its management.

There is money being ring-fenced for flood relief schemes. We are happy that it is in place as this is important. However, I cannot understand how consultants, whose work one would imagine comprises the easy part of the process, are allowing time to slip for so long. The job of the OPW and the office of the Minister of State is to prevent time slippage.

My colleague, Mr. Brendan Dempsey, will talk about insurance.

Mr. Brendan Dempsey:

Deputy Stanley asked if we had contacted anybody in respect of our complaints. I have to hand letters to the insurance ombudsman and his reply. I have corresponded with head of the Irish Insurance Federation, the Governor of the Central Bank, the Taoiseach and Ministers. I have listed in great detail the complaints I have made about the insurance industry, yet absolutely nothing has happened. I am sorry to have to say that.

Brian Stanley (Laois-Offaly, Sinn Fein)
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It is good to hear it as it is.

Ms Gillian Powell:

In the case of Bandon, the scheme would need to be in place only for a couple of years. When the works would be done, we would not have to worry and I would not care whether I had flood insurance. We have great confidence in the OPW. Its work is very good and when it does work in a town, it becomes flood-proof to a large extent.

Ms Seosaimhín Ní Bheiglaoich:

Can I ask Deputy Stanley where the €7 million in unspent funds for flood relief is?

Brian Stanley (Laois-Offaly, Sinn Fein)
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I asked a parliamentary question because someone said to me that there may be unspent money. I tabled the question approximately three months ago. At that stage, €7.7 million or €7.9 million for flood relief works was unspent by the OPW. Although I do not know for sure, I suspect this is partly attributable to time slippage and the hiring of consultants, as referred to by Mr. O'Donovan.

In some cases, the approach of the National Parks and Wildlife Service has been an issue. I do know now whether there has been a direct impact on some of the town relief schemes. We have met those concerned in the Shannon area. Not only is the National Parks and Wildlife Service in danger of wiping out the corncrake, it is in danger of wiping out human habitation along the River Shannon owing to the way it does things. In the case of the Shannon, for example, it is supposed to be trying to protect wildlife but the rigorous way it operates is such that the callows are being caused to flood, thereby washing away the corncrakes. The effect is the opposite to that desired. In the case of minor works, which might involve the removal of a bow of a tree and or one trailer load of silt from one point in a river, at a cost of €1,000 and requiring half a day's work with a Hymac and dump truck, the National Parks and Wildlife Service requires an expensive bird survey. It must be up to date and the one the council will have obtained the preceding year for the same stretch of river will not suffice. This is the type of messing around that occurs. In fairness to the OPW, this type of codology may be partly why the money is not being drawn down by it.

The attendance of the delegates today has crystallised my frustration over the whole process. In other countries, if something needs to be done a team is put in place and all blockages are removed. The first step taken is to protect the towns and human habitation, and wildlife is protected next. That is the pecking order. The problems are sorted out and dealt with. To get anything done in Ireland, however, involves a different approach.

I noted the progress of a piece of paper around the OPW for four or five months last year and know what it can be like. Having the piece of paper shifted from one desk to the next can take a hell of a long time. The paper did not pertain to flooding but to a different matter. Unless the State organises its affairs better and clears away the blockages, people such as the delegates will have sleepless nights. We must try to identify the locations of the blockages. I proposed to this committee some weeks ago that the Minister address the flood relief issue in the Dáil. We should have a serious debate on it and use the information the delegates are giving us.

Catherine Murphy (Kildare North, Independent)
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I represent Kildare North, where there has been extensive flooding in places such as Celbridge, Leixlip, Maynooth, Johnston, Kill, Straffan and Sallins. These locations featured in news items over the past ten or 12 years. There was footage of an individual in a rowing boat in a housing estate in the town of Celbridge. This is crazy stuff. The local authority and OPW response can be good and bad. I find that bigger the area affected, the quicker the response from the OPW because the cost-benefit analysis will prioritise such an area.

Even where there are very expensive and satisfactory mitigation measures, problems still arise with insurance companies. In the past couple of weeks, a resident contacted me about the lack of insurance cover for a housing estate on a hillside that never flooded. Some 200 houses were refused insurance cover because they are within 500 m of the canal. The residents always had insurance cover in the past. There is no history of flooding.

I was contacted by an individual from another estate who is also having difficulties. Although he had been paying a relatively small sum of €280 or €300, he received a quote of €1,000, which is prohibitive because he is on a low income. These are but two examples. There is no history of flooding in either of the areas in question but, because there has been some flooding in the town, the insurance companies are adopting the aforementioned positions. The town is built on two hills so there are areas that are more prone to flooding than others.

There is no doubt that what the delegates are saying about geocoding, as articulated by the current Chairman and previous Chairman, is correct. It appears there is a cartel in operation because is not coincidental that people from different locations are telling us the same things independently of each other.

One of the key issues is that when mitigation work is done there must be some formal certification, whether done privately or by the OPW, which will be sufficient for the insurance companies to accept that the risk is no longer there. If the witnesses have ideas in terms of protocols, it would be useful if they would forward them to us because detail is really important for working out solutions. Details on why insurance companies refuse cover, for example, would be very useful to have. We need to find a way of capturing such data. Insurance companies themselves should be capturing that data and telling us why they are refusing to provide cover for householders. Armed with such data, we can then address the issues with the industry.

I have seen some really good work done by the OPW, but on the Liffey they started at the top and worked their way down when they should have started at the bottom and worked their way up. The approach they took meant that they would inevitably produce a flood further downstream. That is the kind of thing that we can justifiably criticise.

There is no doubt that this committee acknowledges the extent of this problem. We are very concerned that we need to deal with this issue but we need to construct a slate of measures that we can bring to the Minister for the Environment, Community and Local Government, Deputy Hogan or the Minister of State at the Department of Finance, with responsibility for the OPW, Deputy Hayes. We must deal with this because householders at risk of not being able to get insurance against flooding and not being able to sell their homes is a very serious issue. It would be useful to hear specific ideas on the kinds of protocols that might work or on systems in other countries that might work here. Obviously we will do some research ourselves but specific examples of what the witnesses would like us to do would be very helpful.

Mr. Enda O'Donovan:

I can assure the Deputy that we will forward the protocols to the committee. The protocols are the building blocks. If we know where the insurance companies are coming from then we can work with them to get cover. People who have had a previous flood event generally tile the ground floor, raise sockets, install flood barriers and so forth in order to mitigate any potential loss for the insurance industry but the industry ignores this. People who take action that will reduce the risk for insurance companies and lessen potential claims should get credit for that but the insurance companies do not even ask questions about this.

We have details on protocols for addressing low, moderate and significant risk. I know the OPW is talking to the insurance industry. When representatives from the industry appeared before this committee last September, they were asked if they acknowledged the work that was done by the OPW. They answered to the effect that they would wait and see. I do not know how many hydrologists work for the IIF but that response was frightening. The OPW, while it has its faults, is taking action on a scientific and sound engineering basis but the industry representatives who were here last September rubbished that work.

The industry must buy into protocols and it is up to Oireachtas Members to set out the rules and insist that they buy into them.

Ms Gillian Powell:

It is my belief that the insurance companies do not want to insure for risk. That is the bottom line. We often follow trends in North America and in that jurisdiction one takes out flood water insurance, rain water insurance or sea water insurance but if one is affected by any of these, one will not get cover against it. The committee members need to be really clear on this issue. Those in the industry are going to duck and dive. The situation for me and people like me is so serious that it strays into the area of Government. After Hurricane Katrina people sued the US Government over the failure of the levies. That route is open to people here too, although it would be a long, hard road to follow. There is an onus on the Government, under the UN Charter on Human Rights, to ensure that people have shelter. This issue can be addressed if there is enough passion to do so. If there is another catastrophe in Ireland, perhaps the passion will emerge then.

The committee members must be clear about this. When they ask what the insurance companies will not insure for, the simple answer is that they will not insure for risk. That has been my experience and that of all the people in Bandon to whom I have spoken. Only one person has gotten flood cover but that is because he did not claim after the last flood because his premises was not really affected.

Kevin Humphreys (Dublin South East, Labour)
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I thank the witnesses for their attendance today. My first experience of flooding was when my family home in Ballsbridge Avenue was flooded in the 1960s. There were further floods in 1986 and 2011. There was also a major flood event in Ringsend in 2002. It has been a long and difficult road. The last time the IIF appeared before this committee, I highlighted a survey of over 1,000 householders who could not get insurance, despite the fact that the OPW had carried out extensive flood protection works in their area. The industry questioned the certification provided and I felt that the IIF wanted to veto the professional engineers. The OPW was happy to certify according to international standards for up to a one-in-two-hundred year event, which is higher than what the witnesses have outlined to us today. I found the response from the IIF highly unsatisfactory.

The IIF also pointed out that the claims are much higher now because during the boom people finished their homes and businesses to a very high specification. However, I reminded them that they also charged higher premiums for insurance cover during that time, which they were not taking into account.

If flood protection work is carried out for a one in a 200 year event, the insurance companies are losing out on business. One of the most secure areas in Dublin, in terms of flood protection, is around Stella Gardens. A very high flood defence wall has been built and if that area floods again, we might as well write off most of Dublin city. The OPW has protected it to an enormous extent but not a week goes by without me getting a call from someone in that area who cannot get flood insurance. I got a call recently from someone whose parents had passed away and he wanted to sell the house but he could not do so because the prospective buyers cannot get a mortgage because there is no flood insurance available for the house. Action is the only option here. Given the number of witnesses who have come before us on this matter, we will have to issue a report with recommendations. I would like to see the committee working towards drawing up a report that will influence legislation, if needs be.

Would the witnesses agree that certification which is based on international standards should be accepted by insurance companies? The other issue is the geo-coding, which must be broken down to a much finer level. Some of the insurance brokers are very good in that they will visit the premises and the area and then make a case to the insurance companies. They will point out that a property is twenty feet above sea level and will never flood, even if it is in a designated flood-risk area.

I always find something very funny. We live in the shadow of the Aviva Stadium, which is named for one of the major insurance companies. However, in my area Aviva will not provide flood insurance, yet every night one can look at an advertisement that is in the so-called flood plain in which a man gets out his jacket to bring his son to a rugby match. It is ironic.

We have to investigate the cartel further and we must have evidence about that. With regard to the figures, the Insurance Federation was talking about 10,000, but the witnesses say it is 50,000. Have the witnesses looked at those figures a little more tightly? There is slippage for many different reasons. Sometimes it is people with goodwill trying to protect the environment. They overlook the traumatic effect of a household not being insured where the OPW is trying to press on but is delayed because of planning. Where people's homes are in danger, should there be a balanced structure? We have been talking about putting a balance there of protecting life and property over a short-term flood prevention. Where should the balance be and do the witnesses have an opinion on that?

It is a shame that, as Deputy Stanley pointed out, we have not hit the targets on spending. It is mainly because of the slippages. We will have to look at the consultants there.

Ms Seosaimhín Ní Bheiglaoích:

Does Deputy Humphreys have any information on why there is a delay in applying for planning permission for the proposed wall in Dodder View Cottages?

Kevin Humphreys (Dublin South East, Labour)
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I do not. It was pointed out that the reason is that they are working up-river, so they are working up to it. They did not have to do an environmental impact statement further down the river because they did not have to go near the river itself to set the wall. I will check what the position is with the planning application and refer back to Ms Ní Bheiglaoích.

Mr. Brendan Dempsey:

The Society of St. Vincent de Paul in Cork has a group of professionals from the insurance industry helping us. They are willing to appear before the committee and give evidence of what they consider to be sharp practice by the insurance industry. Should the committee wish to avail of that, they are quite willing to meet the committee anywhere and discuss it.

Mr. Enda O'Donovan:

On the issues raised by Deputy Humphreys, certification and protocols go hand in hand. It is vital that there is a certification process which leads to protocols that the insurance industry should follow. If the insurance industry will not do that voluntarily, I urge and beg the committee to legislate. We cannot wait ten years. Some areas will be sorted out sooner than others, but we are talking about the entire country. The Deputy asked about figures. The Irish Insurance Federation, IIF, says that 2% is not covered. If one looks at other information it has, that equates to 38,000. I do not know where it got the 10,000 figure. The Irish Insurance Brokers Association maintains that 50,000 are uninsured. Being uninsured has nothing to do with flooding, and the figures for flooding could be as low as less than 20,000. The insurance industry, using geocoding, has decided not to insure in vast swathes of ground. There is thought and analysis behind the figure of 50,000. Certification and protocols must go hand in hand, and the Members of the Oireachtas must lead on that. I cannot put it plainer than that.

I have more or less answered the question on geocoding. Time slippage is up to the OPW. It must lead and manage that. It is the big issue for all of us. In many respects we have a great deal of time for gentlemen such as Tony Smith and Michael Collins, who are wonderful at their jobs. They have a fierce interest and know their stuff. We have no problem with the Minister of State, Deputy Brian Hayes. The time slippage is invariably due to the consultants who are being brought in to do certain jobs. Only a handful of consultants are ever used. There is only a handful who are expert enough to be used. There is time slippage all the time, and it is huge time slippage. That is why we have to put this proposal for a pilot scheme. We cannot wait for the OPW and I cannot stress that enough. We cannot wait because we have nothing left to survive another flooding event.

Denis O'Donovan (Fianna Fail)
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I am sorry for being in and out of the meeting but I was supposed to be in the Chair of the Seanad half an hour ago so I had to get a substitute. I welcome the group and particularly those who made the journey from west Cork. I will not go into specifics but I am aware of the reality for the people in Skibbereen, Bandon and many other towns.

I will make a few brief points. I am not a member of the committee, Chairman, and I appreciate you letting me participate. My first point is for Mr. Dempsey from the Society of St. Vincent de Paul. I have a fear that the proposal he has made in very good faith might be seen by the Insurance Federation and the insurance industry generally as an opt-out. In other words, if somebody takes up the slack from the industry, it might say, "That is great. We will put in as little as possible". The fear is the industry will decide to opt out and let the Society of St. Vincent de Paul and others at it. Also, there is a need for a national response to this issue. The Chairman and the committee might consider whether it is worth having a more in-depth investigation or perhaps a sub-committee could examine it. I have raised this issue on three or four occasions in the Seanad and previously as a Deputy in the Dáil but I got nowhere. Mr. O'Donovan has strongly made the point that we should legislate, but I wonder if, under the Constitution, we can compel an insurance industry to do something in a free market. If we can, we should certainly explore that avenue. I would support it.

A number of other interesting points have been raised. People have mentioned the situation with regard to certification or, perhaps, a declaration of completion. However, we are wasting our time if, after significant work has been done in places such as Fermoy, Mallow and Clonmel and hopefully will be done in places such as Skibbereen, Bandon and along the Dodder bank, at severe expense for the taxpayers and it is highly unlikely that there will be more flooding there again, the insurance companies simply respond that geocoding shows it was historically a flood plain so they will not cover them. I do not know how we could overcome that. It would be a disaster if, after all the money spent and all the work done by the last Government and the current one on trying to resolve the flooding issue, we still faced the problem that properties are uninsurable. The geocoding issue should be hit on the head, sooner rather than later. The town I am from had flooding historically, primarily tidal flooding. It is in a basin on the side of a hill, and probably 90% of the individual housing and business would be above the level of any flooding. If 20 properties in Bantry, Skibbereen or Bandon got flooded, with geocoding the rest of the properties will be tarred with the same brush, even though they are 100 ft. or 200 ft. above sea level.

I appreciate the efforts of the witnesses and acknowledge the tremendous work they do, in a voluntary capacity. I am aware of that tremendous work from the Skibbereen flood committee and particularly the Bandon Flood Group. They give significant support and they are giving those of us in public life a major impetus to react to the problems they are dealing with. However, I have deep concerns and I look forward to representatives of the Insurance Federation appearing before the committee.

Basically, it claims that this is not its baby and that it does not want to adopt it.

Mr. Enda O'Donovan:

I will begin the answer and Mr. Dempsey will conclude it. We only want the legislation on the protocols and certification. The insurance industry must accept these certifications and protocols on why it should insure areas. Our proposal is not for insurance. In no way should it be seen as insurance. It is a trust fund to help people. Mr. Dempsey can expand on this point.

Mr. Brendan Dempsey:

Senator O'Donovan is concerned that the insurance industry might opt out of the problem if others take up the slack. It has already opted out. In those areas where it has not opted out, it has managed to treble the price of policies while removing all of its risks. This is a beautiful move for a business and the industry has got away with it. Will the Houses examine the legality of what the industry is doing? They might be surprised by what they find.

Denis O'Donovan (Fianna Fail)
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I am playing the devil's advocate, not countering our guests' wonderful proposal. To be honest, I do not trust insurers in this business area. In my attempts over ten years to have them consider this issue, they have not wanted to know about it.

Noel Harrington (Cork South West, Fine Gael)
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I thank the Chairman for allowing me to attend. I am not a member of this committee. I am pleased to have listened to the testimony of the flood forum, particularly its members from west County Cork. I am familiar with the Skibbereen and Bandon issues. To proclaim an interest, I rent an office in Skibbereen. If history repeats itself, I will be in a dinghy at some stage.

What I take from our guests' testimony is the fact that there are great differences. For example, I have taken the opportunity to look at the works on the River Dodder in Ranelagh, particularly in proximity to the Aviva Stadium. Clearly, some of those engineering works will push the problem elsewhere. This issue must be addressed. One must trust that people know what they are doing, have recognised the problem, have identified a solution and will rectify the situation.

Representatives from west County Cork know about the Skibbereen and Bandon situations and the proposals on same. Engineering issues that arise in some small villages and towns in other areas will not be provided with an engineering solution in the short or medium term. Elsewhere, dwellings are built on flood plains. There may be no engineering solution to them. They will simply flood. Senator O'Donovan mentioned coastal flooding, which affected us recently. One can try to find an engineering solution to that problem.

Given our guests' comments, building an engineering solution can take a frustratingly long time, but the issue, and the one that I am interested in, is the protocol. Citizens have been affected, almost entirely through no fault of their own, and cannot return to their homes. A modest trust fund that they could easily and quickly access to return them to their homes would be a sensible approach to managing the problem.

Like a few others at this meeting, I was a member of Cork County Council, where I saw a number of Office of Public Works, OPW, flood risk assessment maps as part of a deliberation on local area plans. By and large, a person with local knowledge would agree with the maps' details. What is being proposed now is madness. The historical record shows that it does not make sense. That the insurance industry is using a desktop risk assessment or whatever it is called to exclude every resident in, for example, Ranelagh from accessing insurance after a flood incident is not an assessment of risk. Rather, it is a business decision that insurers have decided to take. The risk is to their profit and loss accounts.

I want the insurance industry to devise a decent risk assessment. From the presentations, I take it that some people will always be at high risk of flooding for whatever reason and that companies will not be able to provide insurance because they would need to pay out every five or ten years. However, this is not the information that we are getting on the ground from people who have never been flooded.

I do not want to make presumptions, as I am not a member of the committee, but I presume that it will issue a report or recommendations. I hope that a template for a protocol will be devised along the exact lines detailed by the presentations. I understand from the presentation that the insurers' rights need not be tapped. Comfort could be given in other ways to people who go to bed every night wondering whether they will wake up in dwellings that are flooded. It is an appalling prospect. With respect to the committee, I look forward to seeing recommendations that are in keeping with the presentation's narrow and achievable focus when describing the problems. I commend the guests in that regard.

Michael McCarthy (Cork South West, Labour)
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Before we move on, officials from the Department are outside and are waiting for the meeting's next instalment to enter. We will take the two remaining members and Deputy Harrington together before reverting to the witnesses. I call Deputy Daly and Senator Ó Murchú.

Jim Daly (Cork South West, Fine Gael)
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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.

Labhrás Ó Murchú (Fianna Fail)
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I apologise - I was delayed in the Seanad until now. Coming from County Tipperary, I am very familiar with these problems and can remember the situation in Clonmel down through the years - it was traumatic. I am also aware of the difficulties on the insurance front. We have just come through a very competitive period for the insurance industry and are possibly exiting it, which means companies can be more selective into the future. Therefore, instead of the position improving I can see it getting worse. I do not see how we can have a solution unless there is a partnership between the State and the insurance industry. If we need an example, let us look at the private health insurance sector. There is no doubt that the Government had an input into the demarcation lines there. For example, if I have been paying for private health insurance for ten or 12 years and then get a bad run of health it is not possible for the insurance company to tell me it will not continue to cover me. That is the position. In my view, there is no difference between that and the situation in regard to property insurance.

We should take up Mr. Dempsey's point and bring those witnesses to the committee because we need to hear from them. In the very same way, we brought in witnesses at the time of the debate on private health insurance. There is almost a no-person's land involved here - people cannot see anybody coming to their aid. The insurance industry will not be enthusiastic about participating. For that reason, I believe a person is just as entitled to consideration from the State, whether this is via a protocol, a procedure or legislation. This should not be the final hearing - we need more hearings in order to keep up the momentum until there is a focus on arriving at a proper solution.

Michael McCarthy (Cork South West, Labour)
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We will hear the panel speakers. I call Mr. O'Donovan.

Mr. Enda O'Donovan:

I will comment on some of the points. There were four events in Clonakilty, two of which should be insurable. It is all about the probability of an event returning, for example, if that probability is one in 300 years. Take the heavy rainfall of 28 June 2012, which was catastrophic, with unbelievable rain. Some 64 mm fell in a couple of hours. The probability of that amount of rain falling in that place again must be one in 300 or 400 years and therefore that event should be insurable. Even though Clonakilty has a name for tidal and other kinds of flooding, events of that kind should be insurable. It is about probabilities and protocols. There is more than one kind of flood. There are houses that should never get cover for tidal flooding but they should get cover for different kinds of floods. Clonakilty experienced four different kinds of flood in one year, which was unbelievable, but they were of different kinds.

At present the insurance industry is getting away with it on the basis of if it flooded cover will not be provided. That is the wrong way of dealing with it. It should be a science. We should be able to calculate something but what the industry is claiming is because an area flooded once it will be permanently excluded from cover. That is wrong but it is what we are up against.

Ms Gillian Powell:

I take Deputy Daly's point but we put forward this proposal because it is a small pilot project that does not cost a lot of money. We would have issues with the agencies that give out the money and that is why we went through the non-governmental organisations such as the St. Vincent de Paul Society. They are used to this and are good at it. They do not seem to lose €7 million and this has left people wondering why it was not spent, which seems to be a big problem. People were asking where it went.

I would also like to make a case for including businesses and those involved in commercial activities. I run a small business, as do many people in the Deputy's constituency and it is very important for the economic value of the whole town community that these businesses get back on their feet. We are the engine, the people who pay all the wages, so it is important. In England, after the riots the Prime Minister David Cameron immediately looked after the business people. The first thing he did was to get the shopkeepers open for business, putting grants in place. I would definitely include them, not rule them out. It is very important for a community that business people are also considered.

Mr. Brendan Dempsey:

Deputy Daly mentioned that insurance companies have to make money, that is the reason they are there and that is fair enough. I accept that. However, there was one insurance company - I cannot remember its name - which published its figures recently. What it paid out on flooding for the year was less than 1% of the total payout. Flooding does not seem to be costing insurance companies that much. One can certainly count the figure in millions but for that one company the amount was less than 1% of its total payout for the year.

In the St. Vincent de Paul Society we have never had the problems we have had in recent years. We do not have time to be dealing with insurance and should not have to deal with such problems.

We believe this issue can only be addressed through legislation and call on the Government to introduce it.

Ms Seosaimhín Ní Bheaglaoich:

I am disappointed with the tone of Deputy Daly's statement. If it is any indication of how the Government views our position, it is disappointing. We have been made out to be very emotional about what has happened to us. If members had experienced flooding up to their ankles or knees a couple of times they, too, would be emotional.

I thank Senator Ó Murchú for his interesting statement on the need for partnership between the State and insurance companies. We need more hearings like this to impress upon our public representatives the horrendous situation which as individuals we are in.

Caít Keane (Fine Gael)
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I would like to respond to the last statement by Ms Ní Bheaglaoich. I live in Dublin beside the River Dodder, which area is often flooded. The work done in this regard was referenced earlier by one of my colleagues. Ms Ní Bheaglaoich asked whether the Government is taking this matter seriously. It is taking it seriously. The constituency which I represent is also represented by the Minister of State, Deputy Brian Hayes, one of whose priorities is address of the flooding issue. He is very proactive. I acknowledge that there is a need for the Government and insurance companies to work together. However, the constitutional question around this issue has not yet been answered.

Like Ms Ní Bheaglaoich, I, too, welcome Senator Ó Murchú's contribution. This is not the first year my constituency has been flooded by the River Dodder but it is the first year in which funding has been put into addressing the problem. Work will be done but perhaps not at the pace which Ms Ní Bheaglaoich would like. The matter is being taken seriously. I listened attentively to the contributions made. Money has been and will continue to be made available to address this issue. The insurance companies will be taken to task but in such a way as comes within the realms of the Constitution.

Jim Daly (Cork South West, Fine Gael)
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I would like to clarify that in the example I gave I was not excluding businesses. I am very supportive of the introduction of an insurance scheme. The point I was making is that the cost for businesses would have to be calculated differently as they would require greater cover. I was in no way suggesting that there should not be an insurance scheme for businesses.

Michael McCarthy (Cork South West, Labour)
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I thank the witnesses for their robust and detailed exchange with the committee, which will form a good basis for its interaction with the representatives of the insurance federation.