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. It should be noted that the provision of insurance cover and the price at which it is offered is a commercial matter for those providers and is based on an assessment of the risks they are willing to accept. Therefore, under the EU Solvency II Directive, neither the Minister for Finance nor the Central Bank can compel insurers to provide such cover.

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 a reasonable expectation that insurers will provide cover.

Alternative flood insurance models have been considered by the Department of Finance in its review of policy in relation to flood insurance in 2016, and the ‘Public Consultation on Climate Change and Insurance’ in 2019. It was found that alternative approaches, including legislating for compulsory cover would have limited impact on the availability of flood cover. This found that mandating the provision of flood cover would result in, amongst other things: an increase in premia for all property insurance policies; increased risk that insurers decide to withdraw from the market and potential contravention of EU rules.

Discussions 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 on 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. Separately, the Department has regular meetings with Insurance Ireland on a range of insurance-related issues including flood cover.

Arising from this, separate industry and Central Bank of Ireland surveys indicate that 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 to mobilise.

It is also worth noting 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. It has access to a wide range of providers and products, and can offer advice for customers in sourcing cover. It 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 encouraging industry to have a more responsive approach to the matter; engaging with the Central Bank of Ireland; and considering the impact of climate change on insurance over the long term, including through policy channels such as the European Commission and OECD.

Finally, please 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.