Thursday, 1 April 2021
Department of Finance
86. To ask the Minister for Finance if his attention has been drawn to the fact that insurers have refused to provide flood risk cover even in situations in which no flooding has ever occurred; if his Department or the regulator has protocols in relation to transparency and proportionality in such situations; and if such cases fall within the remit of the Financial Services and Pensions Ombudsman. [17789/21]
AT the outset, it is important that I remind the Deputy of the fact that the provision of insurance is a commercial matter for insurance companies, which is based on an assessment of the risks they are willing to accept. Consequently, neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products. This position is reinforced by the EU framework for insurance (Solvency II Directive).
Having said that, I am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses. Current government policy in relation to increasing flood insurance coverage is focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. To achieve this aim there is a focus on:
- Investing almost €1 billion in flood relief measures over the lifetime of the National Development Plan 2018-2027;
- Implementation of flood relief management plans by the Office of Public Works (OPW), and;
- Maintaining channels of communication between the OPW and the insurance industry, in order to reach a better understanding about the provision of flood cover in affected areas.
The above approach is underpinned by a Memorandum of Understanding between the OPW and industry representatives Insurance Ireland, who meet on a quarterly basis to help implement this initiative. This provides for the exchange of data in relation to completed flood defence schemes which should in turn provide a basis for the increased provision of flood insurance in these areas.
I acknowledge that while there has been an overall increase in the provision of flood insurance between 2015 and 2020, some householders are still experiencing difficulties. This is particularly the case for households in areas with demountable flood defences. Indeed, this is one of the key themes that arose from my Department’s Public Consultation on Climate Change and Insurance. My officials engage with both Insurance Ireland, the OPW and other stakeholders regarding flood defence schemes and how the levels of insurance cover might be improved in areas where flood defence works have been completed.This is a difficult issue, however the Deputy should be assured that Minister of State Fleming and I will also continue to engage on all aspects of insurance reform, including flood insurance issues, and that every effort is being made to encourage a responsive approach from the insurance industry. As recent as last month Minister of State Fleming participated in a meeting between Insurance Ireland and OPW Minister of State Donovan on the issue.
Furthermore, as the Deputy may be aware, the Central Bank of Ireland’s Consumer Protection Code states that a regulated entity must ensure that in all its dealings with customer it acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market. In the event that an insurance undertaking refuses to quote a consumer for property insurance, the Consumer Protection Code states that an insurer must inform the consumer of its refusal and its reasons for refusing cover.
Finally, individuals who feel they have been unfairly treated by an Insurance or Financial Services Provider can make a complaint to the Financial Services Ombudsman. I would also note that Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance cover, including flood insurance. This can be accessed at: firstname.lastname@example.org.