Dáil Éireann debate -
Thursday, 15 Jun 2023

Vol. 1040 No. 2

Flood Insurance Bill 2021: Second Stage [Private Members]

Deputy John Brady

I move: "That the Bill be now read a Second Time."

In 2021 a report from Gamma location services identified some 70,000 homes in Ireland are at risk of flooding which could result in an estimated cost of approximately €2 billion.

In a contribution to the 2019 Department of Finance public consultation on climate change and insurance, a member of the Scottish Environmental Protection Agency described flood insurance as one of the key indicators of community flood resilience.

In the years and decades ahead, there can be no doubt of the enormous challenges that communities will be forced to face as a consequence of climate change. Its impact will be felt across all of our lives. Government will be challenged over the coming years to address its impact across a range of areas.

In Ireland, our primary challenge in respect of coping with extreme weather events that will impact directly here in Ireland will be in dealing with the impact of flooding. Over the past number of decades and across the length and breadth of the State, we have witnessed communities facing devastation, often repeatedly, resulting from extreme weather events leading to flooding.

Flooding has an absolutely devastating impact. It leaves families with homes, possessions, and family heirlooms destroyed. Businesses see their premises devastated, their stock destroyed, with companies often being left unable to fulfil orders due to the disruption caused by flooding. The responsibility of formulating a cogent and effective response lies with the Government. We are all no doubt aware this will require a multifaceted approach and one that includes rigorous planning, the maintenance and management of our rivers, and the completion of flood relief schemes, many of which are ongoing, along with many more areas of work.

The Government has neglected to address the glaring issue of the provision of insurance cover to homeowners and businesses in flood-affected areas where the Office of Public Works has carried out remedial work. This means that Deputies, such as myself, have no recourse other than to bring forward legislation in a personal capacity in an attempt to address this striking anomaly.

It is the purpose of this legislation to seek to establish fairness in the market for property owners in the provision of building insurance and to provide for related matters. The current blatant and unwarranted state of unfairness needs to be addressed. At this point in time, under current conditions, the situation across this State exists where there is unreserved discrimination against private and business property owners in flood-affected areas. This is despite the fact that following a 2007 EU directive, the Office of Public Works, OPW, was tasked with completing flood relief schemes to the necessary specification leading to remedial work being carried out by it to mitigate flooding.

Since 2018, the Government has committed €1.3 billion to 2030 under the national development plan to deliver some 150 additional flood relief schemes identified as part of the OPW’s Catchment Flood Risk Assessment and Management, CFRAM, programme. This partnership between the OPW and local authorities throughout the State has led Ireland to treble, to a figure of 98, the number of flood relief schemes currently at design, development, and construction stages.

Since 2018, the Irish taxpayer has funded flood relief schemes to the value of €296.2 million. That has to be welcomed. Those flood schemes have been undertaken right across the State, stretching from Donegal to Cork and from Galway right across to Wicklow. While these figures and an expenditure of just under €300 million sounds impressive, it is substantially less than what is required to keep pace with what has been committed to by the Government. These schemes are designed to provide one-in-100 years or more protection against flooding. They are welcome, necessary and right.

While, as I said, funding levels must be increased, the speed of roll-out needs to be accelerated alongside this. The impact of the investment to date has proven that it is possible to provide significant levels of protection against flooding for homeowners and businesses with the appropriate level of planning and funding.

Despite this substantial investment of taxpayers' moneys by the State, the insurance industry has refused to provide cover for homeowners in some of the areas where relief works have been completed. This is having a very real and detrimental impact on local communities.

In my home town of Bray, I have met and talked with, and campaigned alongside, many individuals who reside in flood-affected areas. I have witnessed their despair, frustration and anger first hand.

In 1986 Hurricane Charley devastated the State and, indeed, County Wicklow, flooding and damaging not just homes, but also dozens of businesses in the Little Bray area. More than 350 jobs were put at risk because of the flooding that followed the storm. It was as a result of a campaign, which like many more across the country ran for many years afterwards as ordinary people and small business fought to preserve their homes and livelihoods, that the river Dargle flood protection scheme, in which the OPW carried out remedial work to the cost of €46 million, was completed in 2017.

I acknowledge and applaud the efforts of groups, such as SWAP, the community of Little Bray and the Office of Public Works, which spearheaded the works. The failure of the insurance industry to provide insurance cover to homeowners in flood-affected areas that have been remedied is simply outrageous and is totally unacceptable.

This legislation, which I have moved on Second Stage, will end this unfair practice by the insurance industry and will prevent it from continuing with its discriminatory practices against homeowners and businesses. This legislation will offer protection to homeowners and businesses situated in areas the OPW has designated as having a one-in-100 years risk, or more.

The legislation will offer further protections by entitling property owners to bring forward complaints to the Financial Services and Pensions Ombudsman if they believe insurance companies attempted to overcharge for premiums or if they believe they were unreasonably denied insurance. The legislation will empower the Central Bank to carry out assessments of individual insurers and how they deal with insurance applications from property owners in the affected areas. It will also allow the Financial Services and Pensions Ombudsman the authority to direct an insurer to offer insurance to customers at a price and on terms it deems fair, reasonable and appropriate.

Flood insurance is not only a matter for homeowners. As important as that may be, fair and equitable insurance is critical to the existence and expansion of local businesses. I previously spoke in the Chamber about the closure of local businesses in County Wicklow and across the State due to extortionate insurance fees, which saw their insurance premium jump from €26,000 to an incredible €88,000 per year. The simple fact is that without insurance cover, businesses cannot survive. Without business and commerce, our communities will not survive either. Ordinary homeowners are most at risk and are being unduly and unfairly punished and discriminated against by insurance companies. Without legislation and the means to compel fair play, the insurance industry will not act. It is our responsibility in the House to act to protect property owners in flood-affected areas. The insurance industry is acting in bad faith. The very least home and small business owners deserve to expect from the insurance industry is that they reciprocate the efforts of local communities and the State and provide insurance to those in affected areas in which remedial works have been carried out. The failure to provide insurance in these areas damages the financial well-being of localities and endangers the very viability of the businesses themselves. Businesses have been left in a situation in which they are often unable to secure finance due to a lack of insurance cover, curbing growth and potentially leading to closure and the loss of jobs in many communities. There are further impacts when new industries looking for potential sites for development are forced to avoid the areas for which insurance companies refused to provide cover. That impacts the growth and development of many communities.

Homeowners are left in a position in which they are forced to sell their homes and leave in search of work because businesses in the area have failed. The ability to close the deal on their homes could be halted because they could not secure insurance for their homes. The impact of the actions, or lack thereof, by these insurance companies has a detrimental impact on the health of homeowners and forces them to incur substantial and often severe financial penalties as a consequence.

Whole parts of the State have been designated as black spots by the insurance industry. This legislation will end this unfair practice. The Bill will make it unlawful for the insurance industry to wilfully discriminate against homeowners and businesses in communities in which there is now a low probability of flooding as a result of remedial work.

When I use the term "low probability", I refer to the OPW's designation of an area having a one-in-100-years flood risk. It will prevent the insurance industry from continuing its discriminatory practice against homeowners and businesses and offers further protections by entitling property owners to bring forward complaints to the Financial Services and Pensions Ombudsman if they believe the insurance companies attempted to overcharge for premiums or if they believe they were unreasonably denied insurance. The Bill, as I outlined, will also prevent the insurance industry from enforcing discriminatory practices against homeowners and businesses in areas designated by the OPW as flood-risk areas.

The Bill also seeks to prevent discrimination in the offering and pricing of insurance policies to persons affected by insurance companies. It will also allow for individuals to take complaints to the Financial Services and Pensions Ombudsman, which will have the authority to direct an insurance company to offer insurance to a complainant at a rate it has deemed fair and appropriate. The Central Bank will have the authority to carry out an assessment to determine that an insurance company is acting or has acted in compliance with this legislation. The Central Bank can further direct an insurance company to take steps it deems appropriate to ensure the company complies with the provisions of the Bill and it can apply for an enforcement order to force an insurance company to comply with directions from the Central Bank if the company is in breach of the terms of this Bill. The High Court, ultimately, will be able to issue fines to an insurance company, in accordance with the Bill.

I wish to end by making a further argument regarding the need for independent data. For far too long, the Government has relied on information supplied by the insurance industry, the veracity of which has been repeatedly challenged. We need independent data to be made available which will allow the claims of the insurance industry to be challenged and will expose its policy towards those who have been wrongfully denied insurance for their homes and businesses, despite meeting a rigorous level of flood protection - the one-in-100-years threshold, or better, for risk of flooding. I ask the Government not to put forward its amendment and I ask all Deputies to support this long-overdue legislation.

Minister of State at the Department of Finance (Deputy Jennifer Carroll MacNeill)

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann resolves that the Flood Insurance Bill 2021 be deemed to be read a second time this day twelve months to allow for further consideration of the Bill including an updated regulatory impact assessment; and for alternative methods to meet the policy objective of the Bill be assessed, given the legal concerns of the Bill, for current initiatives underway to progress and developments in the wider insurance reform agenda and European Union and Organisation for Economic Co-operation and Development policy space to evolve.".

I thank Deputy Brady for bringing forward this important legislation. I totally support the sentiments behind protecting homeowners and trying to make sure everybody has home insurance, irrespective of the area in which they live. It is important in respect of this Bill and what it attempts to do to think about the role of the State - what it is and is not. It is clear that the role of the State is to make sure that the infrastructure is in place to prevent flooding in the first instance and then make sure insurance companies provide insurance, as the Deputy described. The State's role is not to interfere in a market in a way that creates other problems. For that reason, I put forward a timed amendment for 12 months to allow us to discuss this a bit further. There is quite a lot of complexity in what the Bill suggests. I would like to go through some of that and then respond to some of the issues the Deputy raised.

The Department is not interested in receiving information from industry - the Deputy referenced the Central Bank's ongoing work in this regard. He will have some regard for the independence of the data from the Central Bank. I think we are on the same page in relation to that. On the technicality of the Bill, there is a problem from an EU law perspective and the Solvency II directive in particular. Ireland is part of the EU and part of the European Solvency II directive, which prohibits a member state from adopting rules which require insurance companies to obtain prior approval on special policy conditions and premium levels. There are EU-level problems with this Bill. More particularly, there are a few constitutional problems which I think are worth setting out. It speaks to the role of the State. The Deputy correctly said society depends on commerce and business as much as other things. Whether the Bill applies to insurance companies or any other sort of commercial organisation, when you take commercial risk assessment or commercial decision-making away from a commercial entity, which is sort of the point of the Bill in some respects, you interfere in its capacity for freedom to contract, to operate its business as it sees fit and to do so without a right of appeal.

This is a new standard in terms of intervention in a commercial market. This is a political choice. I appreciate that the Deputy is entitled to make that choice, but there is a broader read regarding what the State's role is in respect of intervening in commercial decision-making. It interferes straight up with freedom of contract and no right of appeal is provided. This could be provided for by means of amendment. There is, however, an access to justice issue for all persons, whether individuals or bodies corporate.

There are also several difficulties with the Central Bank and the Financial Services and Pensions Ombudsman. The Bill now gives them requirements and obligations to go beyond their current mandates. I do not know whether the Deputy has had an opportunity to consult with both of those organisations in terms of what their view might be, but this would require, at a minimum, legislative change, never mind policy change. The European Central Bank, ECB, would also have to be consulted in this regard.

There is also a broader set of unintended effects, I believe. I appreciate what the Deputy is trying to do, and I agree with him in respect of ensuring we have insurance for all homeowners. This is the essence of what he is attempting to do, and I totally agree with this aim. We must, though, approach this in a way that does not create unintended effects for the operation of the market more broadly. Ireland remains a small insurance market. We want to have more insurers here, not fewer. We want to offer an operating environment where insurers will come into the market and we are having some success with this endeavour. We want to ensure and hold the feet of the insurance industry to the fire in respect of the provision of insurance, but we do not want to take legislative steps that demonstrate we are going to intervene in the market in a way that would make Ireland unfriendly to the exercise of commercial activity in the insurance sector or any other sector. Several unintended spillover effects, therefore, must be acknowledged when the State starts to intervene in commercial assessments.

These are just some practical difficulties with the Bill. Nevertheless, I agree with the purpose of the Bill and the work that has gone into it. It is worth considering the broad genesis of this legislation and the work that has gone into it, as the Deputy has referred to. There was a Private Members' Bill in 2016, and a considerable regulatory impact assessment was done in 2019. The Dáil then fell, as did the Bill in question. That happens. The context has changed considerably since then from an international perspective as much as from a domestic one. It has changed in respect of pricing and the level of collaboration in the EU and international contexts regarding intervening in climate change and climate insurance. It is well worth having a fresh regulatory assessment undertaken now some four years from that previous work to reflect these different circumstances. We also had the Central Bank analysis in 2021. Additionally, as the Deputy referred to, considerable work has been done by the Office of Public Works, OPW, on demountable defences.

We have also got new information on the areas that may very well be at risk. The Deputy referred to a number of areas in his constituency. I also have some in my constituency, including at Sandycove and Newtownsmith. I have spoken to Councillor Aoibhinn Tormey in Sutton, which is another area at considerable risk in this regard. Those areas, however, are themselves changing and evolving and it is therefore well worth considering a detailed regulatory impact assessment now, which would provide better analysis, based on the information we have now in 2023 compared with what we had in 2019, on several different points.

Regarding the OPW and Insurance Ireland work that is ongoing, the OPW, as the Deputy is aware and as he referred to, is engaged in a substantial body of work in relation to this issue. It is working with Insurance Ireland to provide information in this regard. The Deputy is quite correct about this. There is a working group, which has now been expanded to include representatives of local authorities as well. This is to ensure there is a better local understanding of the local situations and how to make progress in this regard. I refer to where the priorities should be. The OPW has recently provided Insurance Ireland with detailed information on the various types of demountable defences and the engineering work involved in this regard.

There is some positive news in respect of there now being a progression of a service level agreement, SLA, for the defences in Mallow, for example. This SLA will bring assurance regarding the operation and governance of those defences. This should, I believe, result in insurers being more comfortable providing cover in these areas. It goes much further, however, than being comfortable. It is not really about being comfortable. This is the context in which I went back to what the role of the State is and what it is not. The State has a responsibility in respect of the construction of the infrastructure. It is the State's responsibility to also ensure, as far as is commercially possible without breaching EU law, that there is no excuse for an insurance company not to provide cover of the kind we are talking about.

This is why I would like to have the 12 months to discuss this matter further. How far can we go without intervening in a commercial market and having broader impacts? I refer not only to the breach of EU law but to the broader effects in terms of commercial operations in this State that I do not believe the Deputy wishes to bring about more broadly. This is why I am suggesting a timed amendment regarding this aspect. I assure the House that this message is constantly being strongly impressed on the insurance industry by me and the Minister for Finance, Deputy Michael McGrath.

It is well worth looking at the Central Bank's most recent flood insurance survey. This stated that insurers nationally responded to the effect that 97% of all property insurance policies include flood cover and that this represents the baseline national coverage level. The survey then examined flood-protected areas to compare these to the baseline national coverage level. Within the areas covered by 18 OPW flood defence schemes, both fixed and demountable, the results were that 92% of policies had flood cover in areas covered by fixed flood defences, 72% of policies had flood cover in areas protected by demountable flood defences and 81% of policies had flood cover in areas protected by both fixed and demountable flood defences. The OPW and the Department of Finance have agreed on the principles of baseline flood cover ahead of schemes being completed. This aims to provide before and after flood insurance to allow a small group of communities to be protected in future. It will also allow us to spot difficulties much more quickly.

In April, a survey was carried out by Insurance Ireland with a pilot group of three schemes in the Bray, Fermoy south and Dodder areas. The results, which we are still considering, and I do not want to tell the Deputy that these are confirmed, were that 81% of policies include flood cover for these groups. I must emphasise that there are complexities with these figures and we are continuing to work on them. Nevertheless, I do wish to provide the most up-to-date information to the Deputy. Work is continuing with Insurance Ireland and the Central Bank to ensure we are assessing these figures correctly and we are monitoring the provision of flood cover to the widest extent possible.

In addition, wider than the specific issue of flood cover is the impact of climate change on insurance more generally, on the associated costs of this, how reinsurers and underwriters are considering climate change more broadly and how this impacts on Ireland. It is certainly the case that insurance is considered on a more global scale than just provision in our market. Reinsurers are pricing into the market major climate events that happen, for example, in France or Germany. This development is having an impact more broadly on the costs provided to insurers in Ireland. This is a significant element, and it will become even more significant in the future. We have the question of the insurance protection gap in the context of climate events. This is not just an issue in Ireland. There is a broader read across in this regard as well, as I know the Deputy understands.

The important policy issue now, in addition to the specific issue relating to the Bill, is the subject of consideration at the EU and international levels. This is alongside the Central Bank and the Department of Finance actively engaging on this issue. I could set out the Government's policy on flooding, but the Deputy has already done this amply and I do not wish to take up his time by simply repeating it. I might address any further questions in my summing up if that is okay with the Deputy.

Deputy Ivana Bacik

I am glad to support this Bill. I will speak a little about its history, which the Minister of State also referred to. It is important that this issue be addressed and it is disappointing to see a further delay being proposed by the Government, given this legislation has had a long genesis, as the Deputy said.

The background to this, as we all know, is that the planet is getting hotter. Unfortunately, severe weather events are becoming more extreme and frequent and sea levels are rising. In fact, recent rates for the relative sea level rise in Dublin have been greater than the global average by a factor of two. Numerous studies have recorded that sea levels along the coast of my constituency of Dublin Bay South and the Minister of State's constituency of Dún Laoghaire are rising faster than anticipated.

These frightening features of life in a climate crisis have real and significant effects for people. One of these effects is on homeowners, of course, who must now deal with damage caused by flooding. Numerous constituents of mine in Sandymount, Ringsend and Irishtown and along the docklands have contacted me because they cannot obtain flood insurance. This has had a significant impact on the terms of their mortgages, aside from the obvious disadvantage they are at in the event that their homes are flooded, which would cause immense distress and damage. Anyone I know who has had a house flooded has suffered far more than in the context of the cost incurred.

This is a serious issue.

We are in a housing crisis, where we have a chronic housing shortage and need to build more homes, including homes in coastal areas. I have pushed for greater urgency around the delivery of necessary housing on the former Irish Glass Bottle site in Poolbeg. At this point, when we are building along the coastline, and rightly so, the failure to take responsibility for people facing a risk of flooding in these circumstances is unacceptable.

Some months ago, I asked the Minister for Finance his plans to reform flood insurance and whether he will act so that people have cover where they live in areas with demountable flood defences. In response, the Minister gave a rather unsatisfactory reply, essentially referring to the provision of insurance cover as a commercial matter for insurance companies providing the service. He essentially washed his hands of the issue. As with supermarket pricing, housing policy and energy costs, the Government is taking far too hands off of an approach to the private market. It is non-interventionist, even where we see intervention as being important and necessary.

That is evident in the amendment brought forward by the Government today, which seeks to delay the Bill. As I said, I will return to the genesis of the Bill. The reality is that there is an urgency to this issue for many people who have been affected, in particular around the unavailability of insurance.

My Labour Party colleague in Pembroke, in Dublin Bay South, Councillor Dermot Lacey, has raised the issue of flood defences, a related issue, over many years. He cited the real difficulty with getting procedures and defences moved on swiftly. Much work is needed. We have called on the OPW to take a stronger role in intervening in Sandymount where the flood wall is too low and action needs to be taken. We are very anxious to see these works carried out, in addition to the installation of the necessary cycle routes. All of these are infrastructural matters which must be progressed in tandem with a more sympathetic policy approach from Government and, indeed, insurance companies.

This, of course, is not just an issue in this constituency. My Labour Party colleague in Dublin City Council, Councillor Declan Meenagh, a councillor in Cabra-Glasnevin, has been very active on the matter. He has said that insurance companies cannot have it both ways. They will not insure where they believe there are inadequate flood defences and where adequate flood defences have been installed they will not insure because there was flooding in the past. It is a catch-22 situation for many householders.

As is the case across many parts of Dublin Bay South, parts of Dublin Central have been prone to flooding. We all recall the iconic photos of some of the floods in East Wall, North Strand, Clonliffe and Cabra, which are particularly vulnerable areas. While problems with flooding were identified and addressed in some of those areas following those very serious floods, nevertheless insurance companies simply will not include flooding in an insurance premium in many cases. Due to the fact certain areas have flooded in the past, they said they remain no-go areas for insurance companies. They are acting with total disregard for flood defence works where they have been carried out. I understand some companies have even refused to do a risk assessment on the new set of circumstances. These are issues that impinge very severely on homeowners. That is why the Bill is not, in fact, the first time we have seen this issue come before the House.

The Minister, Deputy McGrath, produced a Bill on this in 2016, as was pointed out. The purpose of it would be to ensure that people who live, work, reside or have businesses in areas where flood relief schemes are implemented would be able to get insurance cover. My colleague in this campaign, Deputy Sean Sherlock, sought last year to resubmit the former Fianna Fáil Bill on flood insurance. He was overtaken by Deputy Brady at the time.

The point is that there is a confluence of views on the need to introduce this sort of legislation. The Government is not opposing the Bill; rather, it is simply seeking to delay it. That shows the cross-party support there is in principle for this issue. I wish to reiterate that while I have referred to various areas and communities in Dublin which are prone to flooding, of course Deputy Sherlock referenced the flooding that took place in Fermoy in 2021. He pointed out that when incidents like that have occurred, relief works have not succeeded and there has been a breakdown. He spoke about the need in those sorts of scenarios to ensure that insurance companies will cover homeowners. The flood protection measures that have been carried out in towns like Fermoy and Mallow are still not enough to give people the protection they need for flood insurance cover. That is why we need to pass the Bill.

I welcome this debate. I am very happy to offer the support of the Labour Party for the Bill. As I said, it is a Bill which comes on the back of previous legislation from Government parties and ourselves. We are glad to see it brought forward. However, we are disappointed the Government is simply putting in place a delaying mechanism, in particular when there is support in principle for the Bill. I would welcome if the Minister of State could set out the proactive steps she will take to address the issue if the Government amendment is passed and it is another year before we can get back to debating this Bill.

Beyond playing wait and see with the European Union, could constructive and meaningful engagement be carried out? I tabled a parliamentary question on this matter. In the reply the Minister for Finance told me there is ongoing engagement, but we are not seeing any results from that engagement. The concern for the homeowners affected is that engagement is pointless if it is not delivering change and has a real impact on those who are affected. The Minister said that in order to address the issue of flood coverage levels in areas with demountable defences, continued engagement with all relevant stakeholders is key. We absolutely agree with that, but it should not be used as a delaying tactic. Can the Minister of State say precisely what form of engagement, impact and effect that engagement will have?

Deputy Ruairí Ó Murchú

I do not welcome the fact we are talking about putting this off for a year. A number of speakers have referred to the fact that this particular issue did not start today or yesterday. It is a huge imposition on those people who do not have insurance for their family home or business. I would like to think it is an issue the Minister of State could work with us on in terms of finding a solution. We do not need to get into the ins and outs of the technical issues that may exist. I could make the argument that technical issues could be dealt with through amendments on Committee Stage. We can all accept there is a problem. We are talking about particular areas where OPW projects have been carried out because there was a necessity to deal with these areas from a flood protection point of view. That needs to be taken into account.

I welcome the fact the Minister State said we need to review and re-evaluate the situation. That is all very positive. We have to examine the entire idea of flood insurance protection because we know it is not only areas that have faced flooding that are involved; we also have the wider issue with areas where people previously had no problem with getting home insurance or insurance for businesses but suddenly no longer could because CFRAM carried out the necessary reviews from the point of view of the necessary protections that needed to be put in place to protect communities.

My area, County Louth, has a huge number of flood protection operations that, it is to be hoped, will be progressed over the next period of time. They are absolutely necessary. I am living on reclaimed land in Bay Estate. I think Lord Limerick, one of the Rodens, once upon a time journeyed to Holland and decided he would come back to Dundalk and reclaim land. That is all sound, but given the circumstances we are in, these are areas that definitely fall into the area of needing flood protection.

Many people who never experienced floods or these particular issues previously have gone to their insurance companies and because mapping has been done regarding flood risks they are suddenly in the firing line, for want of a better term. There is a crazy situation whereby people go through a huge amount of shopping around. One company will cover them, usually for a ridiculously high premium, which calls into question how other companies cannot offer cover. It is an issue that needs to be addressed across the board.

I welcome that the Minister of State said she wants to the insurance industry's feet to the fire. That is a necessity. We all know there is a problem with the insurance. Not a day or week goes by without stories about it, in particular regarding public liability insurance. We have had a number of interactions on this.

I agree that an awful lot of necessary moves are being made at the minute but the insurance industry has not reacted the way we would have liked to the personal injury guidelines and so on. There has been movement but we are in a period where there are fewer claims and where the payouts are lower. I, more than anyone here, want to see the duty-of-care legislation introduced. I think it is absolutely necessary. There will obviously be a time lag in seeing the impact of that. We need to have a shining light on the insurance industry and as much transparency as possible. As much as we cannot intervene in the industry we have to make sure we can have this element of transparency and accountability to make sure everyone gets a fair deal.

The Minister of State previously said that we do not have enough players in the market. I welcome the fact there have been some positive moves and we would like to see the IDA being even more successful at bringing in more companies in the near future. While we are bringing companies in we would like to see an element of fairness regarding premiums. I welcome any moves and imagination and creativity being shown. The Minister of State dealt with QPL. We have spoken previously about the insurance offered to local authorities from the point of view of some element of extending it. It is about getting around the corner and making sure certain events happen because we have a particular problem at the minute.

It is about attracting more companies in but it is also about putting pressure on the insurance companies. We need to look at legislation and at making sure there is absolute transparency so the Central Bank and the rest of us can see exactly what is going on regarding insurance companies. I may have gone off on a slight tangent.

An Ceann Comhairle

That would not be like the Deputy.

Deputy Ruairí Ó Murchú

No, it would not be in any way, shape, or form.

The fact is, we have legislation here. The Minister of State pointed out technical difficulties but she said there is willingness to deal with this issue, so I would like to think there will be an element of co-operation or collaboration afterwards from the point of view of finding a solution. I do not think anyone is particularly worried whether it is this legislation or Government legislation once we can get this problem sorted for these particular people. I ask that we also look at those who will probably have no difficulty when the CFRAM operations I am talking about in County Louth are carried out but who have a difficulty at this point in time. They have never been flooded, but because maps exist that point out there is a flood risk they are, for the want of a better term, being screwed over by insurance companies. In some cases they are lucky to get insurance and it is a problem. Unfortunately, we do not want to create a case where people say they cannot get insurance and that becomes normalised. That is happening in certain parts of the industry, but again I will refrain once again from going off on a tangent.

As much as I would prefer this legislation to progress, and I ask the Minister of State to rethink that, if we can find a solution for people and ensure they can get the insurance they should be able to get and we have a solution, we will all be happy with that.

An Ceann Comhairle

I thank Deputy Ó Murchú for that comprehensive contribution. Would the Minister of State like to respond?

Minister of State at the Department of Finance (Deputy Jennifer Carroll MacNeill)

What if we tried to fix the issue without legislation? The Deputy said he would like me to work with him on this issue. I am working on it all the time. The solution is actually without legislation. The solution involves two things. One is the infrastructure to try to prevent flooding in the first place. I cannot believe Deputy Bacik said we should build along the coast. Really? Should we be building along the coast and have the State insure that knowing it is a flood risk? We have to think this through in a way that is not contradictory. Of course we should not build in areas that we now know to be at risk of flooding and increase the flood risk, and then require the State to be the insurer. We have to think this through logically.

This can be fixed, I hope, without legislation. I actually think the legislation would do more harm than good and I will tell the Deputy why. We are looking for more insurers to come into the market to provide competitive insurance in the broadest way possible, to cover as many sectors as possible at the most price-efficient way for consumers and for businesses. That is my objective. I have zero interest in how well the insurance industry does. I am quite happy it employs so many people in Ireland. That is a really good thing. I am happy we have such a big international insurance sector and that we are doing most of the insurance, for example, for different companies around Europe without really anybody knowing about it. Those are really good things that are happening from an employment perspective. I am not here to support the insurance industry's profit line. I am here to make sure people actually get insurance.

I am not sure we will maintain our operation or our service levels here if we introduce legislation that interferes with the commercial decision-making of insurance companies, or any other company. Instead of having two new insurance companies come in, when decisions are being made at a global level they would look at Ireland and say it will interfere in how the companies make risk assessments in a way that goes way beyond any other country and is in breach of EU law. Companies will say they do fine in France, Germany, etc. I want to make sure we retain our existing insurers, that we get more in and that I then have the best capacity to say to them we have done all of this work, we have all of these maps and that there is absolutely no reason not to provide insurance in these different areas. I would rather have that conversation than a conversation that reassures them we will not interfere in business decision-making. It is not a question of being able to fix it with technical amendments on Committee Stage; it is in breach of EU law. It is not constitutional. Those things just cannot be fixed. We can have a back and forth that looks at it, but the truth is it just cannot be fixed.

I am sorry to speak about Deputy Bacik when she is not here, but there is a contradiction when she said she was disappointed by the delay by the Government. What does that mean exactly? She said it three times, that it is further delaying tactics by the Government. I do not think the Bill will fix it. What will fix the issue is the infrastructure by the OPW, and the capacity to say that we operate in a commercial environment and we are changing the operating environment. We did it with motor insurance and premiums came down and I am doing my level best to make sure that does not drift, that it sticks and that I do not hear any excuses from insurance companies or solicitors or anybody else in relation to it. It is better for the people of Ireland that it sticks. We are changing the duty of care legislation so that there is zero excuse for any insurance company to come to me and tell me there is a culture of slips, trips and falls in Ireland that makes it too expensive to insure a business. That is what I am trying to do and it is the same with this issue.

We have a problem regarding flood insurance for a very small number of people. For those people it is the biggest problem and the risk that they have. However, it is a small portion of the market. I do not want insurance companies leaving because we make changes to the whole commercial and operating environment, with companies saying they were not so sure about Ireland anyway and were thinking of consolidating in eastern Europe or wherever it happens to be. I am not throwing that out as a threat. The Deputy and I have discussed this before. Ireland is a small market and I am not here to hold any insurer's hand to make sure they stay or anything else. I just want to make sure we have the broadest possible insurance provision for the broadest number of people and that we fix the operating environment problems where they exist so that the insurance industry has no excuse not to provide cover in a cost-efficient way. It is important to recognise that 97% of all property insurance policies include flood cover, that 92% of properties with fixed flood defences have flood cover, that 72% with demountable flood defences have flood cover and 81% have a combination. The Deputy can do the maths; it is very clear.

A timed amendment is a way of saying that, yes, we continue to be happy to discuss this because we are not in opposition here. I do not believe that legislation will solve this. I actually think it could make it worse. What I really would like to do is look at it in a really granular way, area by area, and to come to me with the difficulties. We will work with the OPW and fix them. Let me talk to the insurance companies and Insurance Ireland, area by area in a totally granular and realistic way and in a way that is very difficult to avoid the gaze of the State. We have done the work in providing a commercial environment for companies to operate here and will ask them why they are not doing it. That is my genuine view. It is not about being in opposition. It really is about just finding a solution.

Deputy John Brady

The Minister of State is acutely aware that this legislation has been brought forward out of pure frustration.

Deputy Jennifer Carroll MacNeill

I understand.

Deputy John Brady

There is absolute frustration from homeowners and businesses that unfortunately continue to be discriminated against in terms of extortionate premiums being offered or else are simply not given the opportunity to get a premium in the first instance. This legislation follows on from a previous attempt in 2016 by the Minister, Deputy Michael McGrath, who brought forward more or less identical legislation.

It was a problem in 2016. That legislation moved to Second Stage and ultimately went to Committee Stage. All the issues were teased out. Yet now we are being told it is in breach of EU law and that it is unconstitutional. I read through the transcript of those committees. Yes, there were some issues identified there, but I do not think at that point it was deemed to be completely in breach of EU law or that it was unconstitutional. There were issues there that could have been teased out. That was more than well articulated on Committee Stage. I am therefore disappointed that those arguments have now been brought forward on this Stage, when there has been similar or identical legislation, although there are different rationales as to why they should not progress.

I am happy to work with the Minister of State and the Government on this issue. The Minister of State gave some statistics and I hope heard her correctly. She spoke about the River Dodder and the Little Bray area, where 81% of households have flood insurance cover. I hope I am right on that. That is what I think I heard. However, that statistic points out that 19% of households do not have flood insurance cover, after the State has spent millions. I think the figure I gave earlier was €46 million. This was to put in place long-campaigned-for and long-awaited infrastructure to mitigate floods. Still, however, 19% of households are being refused flood cover. That is why I have tabled this legislation.

The actions of which the Minister of State spoke, such as the working group between the OPW and the insurance companies, are all welcome. However, they do not address it. It is still voluntary for the insurance companies to provide flood insurance coverage. I welcome the fact the Minister of State is speaking about fresh regulatory impact assessments. I welcome all of that. However, there comes a time when it is a critical point and intervention is needed. I hear the Minister of State when she says we need more insurance companies in Ireland. However, I do not accept that by bringing forward legislation to address a serious issue such as this for intervention to be taken, it will act as a deterrent to international insurance providers coming into Ireland. It would actually bring us on par with them. I do not think it would be acceptable in Holland or anywhere else for insurance companies to do this. I would love to see some of those statistics as to whether it is an issue there. I seriously doubt it.

This Bill is born out of complete necessity, as I said. I do not accept the rationale for which the time amendment is being brought forward. The issues were teased out when the legislation was introduced in 2016 and when it made its way through Committee Stage. The issues were teased out. There was broad support from right across the House, including from the Minister of State’s own party and her partners in Government. Fianna Fáil obviously brought forward the legislation of necessity. Therefore, let us go through that process. I will work with the Minister of State on all the issues she identified here and we will have those discussions. Ultimately, however, the amendment she tabled to delay the Bill by 12 months is not giving good service to the people who need this insurance cover. I mentioned already that the investment by the State through the OPW in putting the protection in place is welcome. We need more. No one can argue against that. Yet, serious investment has been made and the insurance industry is letting us down. It is letting businesses down and it is letting homeowners down. We have an obligation and a duty. It ultimately comes to a point where there needs to be intervention and I think we are now at that point.

I will leave it at that, but the amendment about the time period is disappointing. Unfortunately, I will not be able to accept that, and I hope the Minister of State understands why not. It is because I think the issues can be teased out on Committee Stage if the Minister of State is willing to allow the Bill to move to that point.

Amendment put.

An Ceann Comhairle

In accordance with Standing Order 80(2), the division is postponed until the weekly division time next week.

Cuireadh an Dáil ar athló ar 4.04 p.m. go dtí 2 p.m., Dé Máirt, an 20 Meitheamh 2023.

The Dáil adjourned at 4.04 p.m. until 2 p.m. on Tuesday, 20 June 2023.