Séamus Healy (Tipperary South, Workers and Unemployed Action Group)
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10. To ask the Minister for Finance if he will clarify the position whereby insurance companies are refusing to give insurance cover to customers who live in or near flood plains, or in places the Office of Public Works have put flood relief schemes in place at significant cost, for example Clonmel, County Tipperary; and if he will make a statement on the matter. [43803/13]

Michael Noonan (Limerick City, Fine Gael)
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It should be noted at the outset that neither I nor the Central Bank can compel insurers to quote for business. The decision to provide any specific form of insurance cover and the price at which it is offered is a commercial matter based on the assessment an insurer will make of the risks involved. I understand that insurance companies as a matter of course carry out reviews of the risks that they are prepared to insure against and sometimes make a decision to discontinue certain types of cover which they consider high risk such as homes close to a river which has previously flooded. These types of decisions are made sometimes on the basis of their broad past experience rather than looking at the individual circumstances of householders.

The idea of making flood insurance compulsory has been considered. However, since it would never be possible to prevent insurance companies quoting based on the underlying risk, it would mean that in areas where there was likely to be regular flooding, the cost of insurance would almost certainly be prohibitive and could make premiums unaffordable for policyholders in general.

What the Government can do, however, is try to address the underlying flooding problem through appropriate remedial works where this is economically feasible. The Office of Public Works is committed to doing all it can to alleviate the impact of flooding through the provision of defences and by taking steps to manage and reduce flood risk in the future through a strategic and sustainable approach under the National Catchment Flood Risk Assessment & Management (CFRAM) Programme. This commitment is underpinned by a very significant capital works investment programme which, along with expenditure on maintenance of arterial drainage schemes, will see up to €250 million being spent on floor relief measures over a five year period.

The OPW aims at all times to ensure that any major flood relief works it carries out, either directly or which it funds local authorities to carry out on its behalf, are executed to a very high standard and, insofar as possible, offer protection against a 1 in 100 year flood event. The OPW has carried out extensive flood relief works in urban areas throughout the country since 1995 and it is satisfied that those works have been effective in protecting a significant number of properties from flood damage. The OPW inform me that works on the Clonmel flood relief schemes 2 main phases (West and North/East) are now completed and the properties previously at risk of flooding are now protected to a 1 in 100 year standard.

I am also informed that the OPW and the Irish Insurance Federation have been engaged in discussions to agree a system of information sharing in relation to completed flood alleviation schemes and works undertaken by the OPW or, in certain instances, by local authorities with OPW funding, and where the standard of protection afforded by these works could be verified.

These discussions are aimed at putting in place a process which will provide the necessary reassurance to insurance companies that remedial works have been carried out to a sufficiently high level to enable them re-commence the provision of flood cover in areas which previously have been vulnerable to flooding.

Agreement on the format of that information has been reached and the OPW has supplied an initial batch of information to Insurance Ireland, including the design standard and extent of benefitting properties and lands in a number of locations where capital flood protection works have been completed by OPW in recent years. The State has made a very significant investment in ensuring that households and businesses in Clonmel are protected from flooding and detailed information on the completed scheme/works has been provided in the agreed format to Insurance Ireland for dissemination to its member companies.

The OPW met with Insurance Ireland recently to review the arrangements and timelines for Insurance Ireland's constituent member companies to incorporate that information into their IT platforms and risk assessment systems. This work will take time but it is hoped that the insurance companies will be in a position to have their systems updated and operational before year end .