Michael McGrath (Cork South Central, Fianna Fail)
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As Minister for Finance, I have policy responsibility for the development of the legal framework governing financial services regulation, including for the insurance sector. Within this context, it should be noted that the provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies providing the service and is based on an assessment of the risks that such companies are willing to accept.

Neither the Minister for Finance, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, nor do they have the power to direct insurance companies to provide cover to specific businesses or individuals. This position is reinforced by the EU Solvency IIDirective insurance framework. As such, the Government faces constraints in seeking to address this matter.

While Ireland has one of the highest rates of flood cover across the EU, the provision of insurance by the State has been previously considered and there are a number of reasons that need to be taken account of:

• Any State insurance scheme would be required to comply with the same prudential rules as private companies, as set out in the Solvency II Directive, which means that the cost would need to reflect the risk involved.
• Such an approach could, as an unintended consequence, actually decrease competition, with insurers potentially discontinuing certain other lines if there is a view the State will insure these risks instead, particularly for market segments considered as of greater risk or unprofitable. This would in turn reduce competition, potentially increasing the cost of premiums elsewhere in the economy.
• There is no reason to believe that the State would be any better at managing risks than private insurance companies, and as a result, there potentially would be a large financial exposure to the State if significant losses were incurred.

Nevertheless, Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with this issue. The cornerstone of this approach is the €1.3 billion committed to the delivery of flood relief schemes over the lifetime of the National Development Plan (NDP) 2021-2030. Where defences have been built, there is the reasonable expectation that insurers will provide cover.

Accordingly, work on flood cover with the insurance industry continue to take place as part of an OPW-Insurance Ireland Memorandum of Understanding Working Group that meets on a regular basis. This focuses upon how the levels of insurance cover might be improved in areas where flood defence works have been completed. The Department also participates in the OPW-chaired Interdepartmental Flood Policy Coordination Group along with the Department of Housing and Local Government and other stakeholders.

Arising from this, separate industry and Central Bank of Ireland surveys indicate the majority of policies in areas with fixed defences have flood cover. However, it is acknowledged that some households are still experiencing difficulties, particularly in areas with demountable flood defences - these are systems that require a degree of human intervention in their mobilisation.

Separately, the Department has regular meetings with Insurance Ireland on a range of insurance-related issues including flood cover. The Department of Finance will continue to monitor and assess the provision of flood cover, including the impact of climate change on insurance over the long term.

Of note also is that Insurance Ireland operates an Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance, which can be accessed at feedback@insuranceireland.eu. Likewise, Brokers Ireland, the representative body for insurance brokers in Ireland, can be contacted. They have access to a wide range of providers and products, and can offer advice for customers in sourcing cover. They can be reached at 01 6613067.

As has been the case, my Department will continue to monitor and assess any flood insurance matters, including through: its participation in the OPW and Insurance Ireland Working Group; actively encourage industry to have a more responsive approach to the matter; engage with the Central Bank of Ireland; and consider domestic and international policy developments, including at the EU and OECD level to these issues as they arise.

Furthermore, it should be noted that Government has made available humanitarian assistance supports to households, businesses and community groups affected by recent flooding events. These targeted funds aim to assist those severely impacted to repair their homes or premises.

Finally, the Deputy should be assured that both I and Minister of State Carroll MacNeill will continue to engage on all aspects of insurance reform, including flood cover issues, and that every effort is being made to encourage a responsive approach from the insurance industry. In upcoming meetings with industry later this month this position will continue to be advanced.