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

I thank the Deputies for raising this important issue, which Deputy Ciarán Lynch previously raised in committee last week. I am aware of the impact of flooding on businesses and households across the country. In regard to the issue of renewing existing flood cover, this is a commercial matter for insurance companies and must be based on a proper assessment of the risks they are accepting. These risks are often considered on a case-by-case basis and neither the Government nor the Central Bank has any influence in this regard. The Central Bank's consumer protection code does not include any provision to compel an insurance company to accept a particular insurance risk. Flood insurance is sometimes not economically viable for insurance companies and, in the interest of keeping premiums affordable for policy holders in general, insurers decline new or renewed flood cover for certain risks. These are commercial decisions that insurers make in the circumstances they face.

The fact, however, that at least 2% of households cannot obtain flood insurance is a cause of concern for the Government. The OPW has actively engaged with the insurance industry for some time on this matter. In January 2013 a working group, comprising representatives from the OPW, Insurance Ireland and the main household insurance companies in the Irish market, was established to consider the matter. It is important that the group's specific purpose and the role of the OPW in relation to it are clearly understood. The OPW has no role or function in regard to the oversight or regulation of the insurance industry. The discussions between the OPW, Insurance Ireland and the companies concerned are focused solely on agreeing a basis on which information can be provided to the insurance industry on flood relief schemes completed or funded by the OPW, and the standard of protection offered by these schemes. The discussions have been complex and technical in nature because it is important that all elements are addressed in a way that provides a robust and reliable system of data exchange.

The working group has made good progress and agreement has been reached on a data sharing platform which will facilitate the transfer of detailed information on completed OPW flood relief schemes on an ongoing basis. This will allow the insurance industry to take account of the levels of capital investment in flood protection measures over several decades by the OPW when assessing flood risk in the relevant localities. The initial focus of the group's work is the provision of information on schemes which provide protection for one in 100 year flooding events. The OPW provided an initial batch of information to the insurance companies and the latter are currently integrating the information into their respective operating systems.

A memorandum of understanding to guide current and future interaction between the industry and the OPW in regard to communications regarding completed flood defence works effectively has been agreed. I expect to be in a position to make an announcement in this regard as soon as the outstanding technical difficulties are resolved by the insurance companies. While the agreement on the memorandum of understanding is to be welcomed, ultimately it is for the insurance companies themselves to decide how they will use the information provided on completed flood defence works. They have committed to take into account the information in their own risk assessments and it is hoped this will facilitate the provision of flood cover in all areas protected by completed schemes.

I assure the Deputies of my intention to progress the matter with the industry and remind them of the avenue that is available to those with difficulties, complaints or queries in regard to insurance cover through Insurance Ireland's free insurance information service. In addition, the Financial Services Ombudsman deals independently with unresolved complaints from consumers about their dealings with financial service providers.

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