Ms Moyagh Murdock:

I am pleased to attend to contribute to the examination of mortgageability, bank financing and the treatment of mortgage holders with respect to properties impacted by defective blocks. I am the chief executive officer of Insurance Ireland. I am joined today by my colleagues, Michael Horan, manager for regulation and policy development, and Ruth NicGinneá, manager of advocacy and public affairs.

Insurance Ireland is the representative body for the Irish insurance industry, representing over 130 members who are providing cover to more than 25 million customers in over 110 countries. The insurance industry plays a vital role in the Irish economy and makes a substantial contribution both socially and economically. The sector employs some 35,000 people and contributes in excess of €2.7 billion annually to the Exchequer.

Insurance Ireland and its members have the greatest sympathy for all those whose homes have been affected by defective concrete blocks and we stand ready to assist affected homeowners as many of them embark on the arduous journey of rebuilding their homes and their lives. We acknowledge the efforts of this committee, the banking and insurance focus group and the wider redress group and individuals to help these homeowners. We were pleased to meet with the banking and insurance focus group in August last year and we have had continued engagement with the focus group.

When it comes to the provision of insurance, it is important to note that household insurance policies cover damage caused by insured perils, such as fire, storm, flood or theft. Defective materials such as defective concrete blocks are not and have not been an insured peril. Furthermore, household insurance policies exclude claims arising from faulty workmanship, defective design and the use of defective materials.

Looking at the issues faced by the affected homeowners, the commencement of the enhanced defective concrete blocks scheme, which provides for the repair of properties that have been damaged by the use of defective blocks, should help to restore affected houses to good repair. Under this scheme, a homeowner must obtain a certificate of remediation signed by the contractor and a competent building professional in order to secure the final grant payment. This certificate of remediation essentially acts as proof that the house has been repaired under the enhanced defective concrete blocks scheme.

While our members will make their own individual underwriting decision, the position of Insurance Ireland members in relation to defective concrete blocks is that in cases where a property has undergone remediation works, this certificate of remediation would be required to take out cover and will ensure the house is treated in the same way as a non-impacted property.

Receipt of this certification would enable our members to underwrite these risks under household insurance policies using normal market underwriting factors and at terms and conditions applied to non-impacted properties, as the contractor and a competent building professional are confirming that the affected house has been restored to good repair. The scheme should help to alleviate matters over the longer term and our members will engage with the certification process for remediated properties.

Insurance Ireland recognises that customers require support at what is a very difficult time. We encourage all customers impacted to contact their insurer in relation to their insurance policy with any cover questions that they may have. Insurance Ireland is not in a position to state a single underwriting approach to these various risks for non-remediated properties. The extent of cover provided is determined on a case-by-case basis and varies depending on the individual risk presented, in particular the current state of repair and condition of the property and extent of any remediation or risk mitigation if applicable.

Insurance companies will continue to engage with their customers when contacted to ensure that they are aware of and understand the level of home insurance cover being provided. Insurance Ireland welcomes the work carried out by the Department of Housing, Local Government and Heritage with regard to the ongoing sub-group discussions, at which Insurance Ireland has represented members alongside colleagues here today from the Banking and Payments Federation of Ireland and Engineers Ireland. We have appreciated the engagement with affected homeowners in this forum and we will continue to engage in these meaningful discussions as they progress.

As we have noted in our previous communications with this committee and with impacted homeowners, we cannot begin to understand the toll this issue has taken on the lives of those impacted. We hope a solution can be found that brings them some closure as soon as possible. Insurance Ireland is happy to continue our strong engagement as a representative for the insurance industry on this matter and I will close by reiterating that when a property has been remediated and the required certificate is held to certify the remediation has been carried out to the required standards, our members are willing to provide full cover to home insurance customers, subject to the normal market underwriting factors and terms and conditions applied to non-impacted properties.

I thank the committee for this opportunity to present our position and I look forward to answering any questions.