Seán Kyne (Galway West, Fine Gael)

It is important to note that the Insurance (Amendment) Bill 2011 is required to extend the scope of the insurance compensation fund to cover all insured risk in the State. It is also important to note that the request for the additional funds has come from the Central Bank. As other speakers stated, this is hugely important if we are to protect more than 1,600 jobs at a time when job retention is as vital as job creation.

The ability of the State to raise finance has been seriously compromised by the previous Government's stewardship of the economy and the bailout arrangements with the EU-IMF-ECB.

The 2% levy to be placed on policies will ensure adequate funding for the insurance compensation fund and must be viewed as a solidarity move. It will protect all insurance policyholders should their insurance company become unable to fulfil its duties and responsibilities because of insolvency. Failure to deal with this issue could have far-reaching consequences that would negatively affect insurance customers in other companies and significantly affect the taxpayer. In this respect, the insurance compensation fund can be viewed as an insurance on insurance, protecting what might, but hopefully will not, happen in the insurance market. I welcome the important stipulation that availability of the insurance compensation fund will be restricted to those companies which conduct at least 70% of their business in the Irish market. Hopefully, this will focus minds in insurance companies that may be reviewing their operations in this country.

The provisions of limits on what may be drawn down in the fund regarding individual policies is also crucial. This will provide a measure of equity so that as many policyholders as possible will be protected and set a standard should payments have to be made in the event of the collapse of an insurance company.

My colleague, Deputy Dara Murphy, referred to insurance issues regarding flooding in Cork in 2009. County Galway was also affected by floods in 2009, the fallout from which is still evident in some people in the county having problems getting insurance. The 2009 flooding left Galway city virtually isolated with access only through one road while Claregalway town was cut off. Since then, the Office of Public Works has done great work with local authorities in providing remediation works. The Minister of State, Deputy Brian Hayes, visited Galway to see the works earlier this year. Much State money has been spent on small and large flood relief schemes. In Claregalway, the bridge has been widened with a proposal for a new bridge.

Some householders affected by the floods have had to build new homes but cannot get insurance for them. There is a distinction between those who have not applied for insurance and those who have applied but were refused. Some homes have had their insurance policies renewed but this depended very much on their insurance provider. One individual who contacted me was refused insurance by his current provider and has been unable to get insurance from other providers because his house was previously flooded. He cannot even get insurance to protect against the possibility of a burst water pipe. He built his new home 20 feet higher than his original home which means flooding by natural disaster is unlikely.

Will such cases be dealt with some form of an insurance credit fund? We must examine a process in which a portion of the insurance fund is used in cases in which a person could not get insurance. The trauma experienced by those affected by the Galway floods is now exacerbated by the concern they cannot get insurance for their new homes. I know the Minister of State, Deputy Brian Hayes, had discussions with the Irish Insurance Federation about this matter. I hope he will follow my suggestion to examine the possibility of introducing a scheme for the small number of people affected by this.

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