Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank Deputy Ó Ríordáin who, once again, has raised this important issue on behalf of constituents. I fully appreciate his frustration at the lack of progress across a number of agencies. I genuinely understand the frustration of the local community around the River Nanakin who every night are worried about whether a substantial amount of fluvial rainfall could affect their homes, the consequent damage that causes and the lack of insurance in that regard.

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. The Central Bank's consumer protection code contains no provisions that compel an insurance company to accept a particular insurance risk.

This reply is written from the perspective of the Department of Finance and I might put some of my own flavour on it. I understand that insurers try to provide flood cover wherever possible. However, in some cases flood insurance is not economically viable for insurance companies and, in the interest 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 upon renewal.

I understand that flood insurance cover is available to most householders; it is estimated that there are difficulties for only 2% of policies nationally. Furthermore, I understand that when making an underwriting decision, an insurer reviews a property's claims history and any flood protection measures implemented by the Office of Public Works or by the local authority. As a result, some people will pay a higher premium because their flood risk is higher or will have a higher flood excess on their policies. I remind the Deputy about the avenues available to those who have difficulties, complaints or queries in seeking insurance cover through Insurance Ireland's free information service.

However, the fact that approximately 2% of households cannot obtain flood insurance is a matter of concern to the Government. I and my officials in the OPW have had ongoing discussions with the insurance industry on the transfer of information on completed flood defence schemes. In January 2013 a working group was established with representatives from the OPW, Insurance Ireland and the main household insurance companies operating in the Irish market to address this issue. The work is proceeding satisfactorily. This will allow the insurance industry to take into account the levels of capital investment in flood protection measures over several decades by the OPW when assessing flood risk in localities where such flood measures have been completed. Ultimately, it is a matter for the insurance companies to decide how this information will be used, but they have committed to taking the information into account in their assessment of risk. This will facilitate the provision of flood cover in all areas that are protected by completed schemes.

The question that arises in respect of the River Naniken, which the Deputy has brought to my attention, is exactly what I am talking about. If we can get a completed scheme for it by way of dialogue between the OPW and the local authority and put in place a flood defence which the insurance companies are satisfied meets the possibility of a one-in-100-year event, or slightly less than that, then insurance cover will follow. In circumstances in which there is no such completed scheme, it is very difficult to predict that insurance cover will follow. The OPW and the insurance federation are trying to come to an agreement on that, which they have been slow in obtaining, but I hope there will be some agreement on it in the not too distant future which will give some measure of hope to people in this regard.

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