Dáil debates

Tuesday, 10 July 2012

5:00 pm

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)

I thank the Deputies for raising an important issue. I apologise on behalf of the Minister for Finance, Deputy Noonan, who is unable to attend. At the outset, I express my sympathy to anybody whose home or business was flooded in recent weeks. It is a difficult time for such people and the House will be aware that the Department of Social Protection is providing individuals with emergency payments to offset immediate needs, for example, assistance with the purchase of food, clothing, fuel and household goods. A number of community welfare service clinics operating in the Cork area have extended their opening hours, providing an additional emergency service. This has been supplemented by facilitating clients by appointments and making house calls to those in affected areas.

Regarding the substantive issue of the provision of new flood cover or the renewal of existing flood cover, it should be noted that this is a commercial matter for insurance companies and must be based on a proper assessment of the risks that they are accepting. These are often considered on a case-by-case basis and it is important to be clear that neither the Government nor the Central Bank has any influence in this regard. The Central Bank's consumer protection code contains no provisions that compel an insurance company to accept a particular insurance risk.

The IIF has advised me that flood insurance cover is available to approximately 98% of householders. The IIF has indicated that, when making an underwriting decision, an insurer reviews a property's claims history and any flood protection measure implemented by the Office of Public Works or local authority. As a result, some people will pay a higher premium because the flood risk is higher or will have a higher flood excess on their policies. According to the IIF, insurers try to provide flood cover wherever possible. However, it makes the point that flood insurance is sometimes not economically viable and, in the interests of keeping premiums affordable for policyholders in general, insurers decline flood cover for new business for some risks or in certain cases need to withdraw flood cover at renewal.

Due to the difficulties currently being experienced by householders in certain areas in accessing flood insurance, the Minister of State, Deputy Brian Hayes, and his officials in the OPW have had a number of meetings with the IIF. These discussions have allowed a sharing of information and better understanding about the scope and scale of the work undertaken by the OPW on its flood risk management programme and, in particular, on the mapping of areas subject to flood risk nationally, which will emerge from the OPW's catchment flood risk assessment and management, CFRAM, programme. This work is being undertaken on the OPW's behalf by specialist consultants and is organised into six regional or catchment areas. These comprehensive studies will recommend an integrated management plan and prioritised measures to address flood problems in areas where there is significant risk. As the Deputies will be aware, a programme of flood relief work is also ongoing around the country.

Part of the discussions have focused on how the insurance industry could best address the issue of the provision of flood insurance where incidences of difficulties in obtaining flood insurance are being raised. The industry maintains that the incidence rate represents a small element of its business and that, where difficulties arise, the causes are complex, with each case being assessed in light of the particular circumstances applying. The OPW and the IIF are keen to establish an ongoing means of sharing information on areas vulnerable to flooding, on identifying flood defence works carried out or funded by the OPW and on the impact of those works in reducing the risk of flooding in areas where flooding previously occurred.

Work is continuing on this matter and a number of issues remain to be clarified with a view to agreeing with the Irish Insurance Federation a viable basis on which information can be provided. There are complex technical issues involved concerning the design standards and risk levels of defence works and maintenance arrangements.

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