Tuesday, 27 May 2014

Questions (145)

Maureen O'Sullivan

Question:

145. Deputy Maureen O'Sullivan asked the Minister for Finance if he will provide an update on the Government's potential levy charge on insurance companies and its potential contribution to a distress fund for home owners without flood cover; the amount of funds that will go towards the Office of Public Works flood relief schemes to increase insurability of homes in certain areas; the amount that will go towards home owners who cannot afford to purchase insurance schemes due to persistent high costs; and if he will make a statement on the matter. [16811/14]

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Written answers (Question to Finance)

The Government has not made a decision to introduce a flood levy on insurance premiums nor has there been any decision about how the proceeds of such a levy would be distributed. 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 & Management (CFRAM) Programme.

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.

In addition, the OPW and Insurance Ireland have agreed on a sustainable system of information sharing in relation to completed flood alleviation schemes so that the insurance industry will have a much greater level of information and understanding of the extent of the protection provided by completed OPW flood defence works and, as such, will be able to reflect this in assessing the provision of flood insurance to householders in areas where works have been completed.

My Department is also undertaking a review of measures to address the availability of flood insurance cover, including the experience and proposals in other countries. In assessing these, care has to be taken that the proposed solutions do not put in place arrangements which, over time, would weaken the provision of insurance cover by the market with possible negative long-term consequences for the economy. The Insurance Compensation Fund (ICF) levy of 2% is applied to home, motor and commercial insurance under the Insurance Act 1964 and came into effect from 1 January 2012.