John Lahart (Dublin South West, Fianna Fail)
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191. To ask the Minister for Finance if his attention has been drawn to the difficulty faced by some home owners along river banks and flood prone areas in obtaining home insurance; his plans to introduce a scheme, similar to the flood re scheme in the UK, whereby the Government assists flood prone home owners obtain affordable cover for their homes; and if he will make a statement on the matter. [39836/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years. However, the provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. 

In my role as Minister for Finance, I have responsibility for the development of the legal framework governing financial regulation, and neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses.

The Department of Finance carried out a review of policy in relation to flood insurance in 2016, which formed part of the Interdepartmental Flood Policy Coordination Group Interim Report, as approved by Government in November 2016. As part of the review, the Department examined a number of possible approaches including approaches in other jurisdictions. It was considered that the approach of an Insurance Pool with State Indemnification similar to Flood Re would lead to additional levies being imposed on all household insurance policies at a time of increasing insurance costs, and could potentially lead to a considerable financial exposure to the State in the form of a State backstop.

The review recommended the continuation of the existing policy approach which has been in place since 2010, and confirmed by Government again in November 2016. This policy is focused on the development of a sustainable, planned and risk based approach to dealing with flooding problems, which should in turn lead to the increased availability of flood insurance. To achieve this aim, there is a focus on:   

- prioritising spending on flood relief measures by the Office of Public Works (OPW) and relevant local authorities,  

- development and implementation of plans by the OPW to implement flood relief schemes, and    

- improving channels of communication between the OPW and the insurance industry in order to reach a better understanding about the provision of flood cover in marginal areas.   

This strategy is complemented by a Memorandum of Understanding between the OPW and Insurance Ireland, the representative body for insurance companies in Ireland, which provides for the exchange of data in relation to completed flood defence schemes which should provide a basis for the increased provision of flood insurance in areas where works have been completed. In this regard, the Insurance Ireland/OPW working group, which the Department of Finance attends, now meets on a quarterly basis to support the information flow and improve the understanding of issues between both parties. 

The most recent Insurance Ireland survey of approximately 85% of the property insurance market in Ireland indicates that of 16 completed defence schemes, 90% of policies in areas benefitting from permanent flood defences include flood cover, with 77% of policies in areas benefitting from demountable defences including flood cover.