Thursday, 17 April 2014

Questions (84)

Martin Heydon

Question:

84. Deputy Martin Heydon asked the Minister for Finance the oversight carried out by the Financial Regulator to ensure that insurance companies alter their flood risk assessments in areas where millions of euro of taxpayers' money has been spent on flood alleviation measures that have reduced flood risks; and if he will make a statement on the matter. [18519/14]

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Written answers (Question to Finance)

Government policy in relation to flooding aims to address the underlying problem through appropriate remedial works where this is economically feasible. The Office of Public Works is committed to alleviating the impact of flooding through the provision of defences as well as a comprehensive assessment of flood risk throughout the country and development of flood risk management plans for the areas most at risk under the National Catchment Flood Risk Assessment and Management (CFRAM) Programme. Because of cost and scale of these types of flood defence works, this approach will see benefits over the medium and long term.

This commitment is underpinned by a very significant capital works investment programme which will see up to €225 million being spent on flood relief measures over a five year period from 2012 to 2016. Works are completed on a prioritised basis. Because of the cost and scale of these types of flood defence works, this approach will see benefits over the medium and long term.  Once these works are completed the availability of flood insurance in affected areas would be expected to increase.

On 24 March 2014 the OPW and Insurance Ireland agreed on a sustainable system of information sharing in relation to completed flood alleviation schemes. The outcome of this arrangement, set out in a Memorandum of Understanding, is that the insurance industry will have a much greater understanding of the extent of the protection provided by flood defence works and will therefore be able to reflect this in the provision of flood insurance to householders in areas where works have been completed.

The underwriting of a particular risk, is a commercial decision to be taken by the individual insurance company, which is based on a proper assessment of the risks they are accepting and the need to make adequate provisioning to meet these risks. The Central Bank of Ireland has no role in relation to issues of pricing or the scope of cover provided by insurance companies, nor any oversight role in relation to their assessment of flood risk.