Dáil Éireann Debate, Tuesday - 10 October 2017
21. Deputy Jim O'Callaghan asked the Minister for Finance the steps he will take to ensure proper and effective regulation of insurance companies on the issue of refusing flood cover; if it will be ensured that cover cannot be refused after adequate flood defence measures have been put in place (details supplied); and if he will make a statement on the matter. [42612/17]
Amharc ar fhreagraI am conscious of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses, and that is one of the reasons the Government has been prioritising investment in flood defences over the last number of years.
However, the provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are willing to accept and adequate provisioning to meet those risks. As Minister for Finance I have responsibility for the development of the legal framework governing financial regulation, and neither I, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems. This in turn should lead to the increased availability of flood insurance. To achieve this aim, there is a focus on:
- prioritising spending on flood relief measures by the Office of Public Works, OPW, and relevant local authorities;
- development of plans by the OPW to implement flood relief schemes; and
- improving channels of communication between the OPW and the insurance industry in order to reach a better understanding about the provision of flood cover in marginal areas.
Insurance Ireland has informed me that its members, since 1 June 2014, have factored data on all completed flood defence schemes, provided by the OPW, into their assessment of flood risk within these areas. This information has been provided as part of an information sharing arrangement entered into between OPW and Insurance Ireland (Memorandum of Understanding). The nature of this arrangement is such that it should lead to a greater availability of flood cover in previously higher risk areas, and at better prices.
While it is not possible for me to comment on individual cases without the full facts, I am advised by the OPW that Bath Avenue Gardens, Dublin 4 is within the benefiting area of the River Dodder Tidal Scheme, the details of which have been shared with Insurance Ireland under the Memorandum of Understanding.
I note however, that the River Dodder Tidal Scheme contains three demountable defences. The most recent Insurance Ireland survey (December 2016) of approximately 85% of the property insurance market in Ireland indicates that of 16 completed defence schemes, there has been an increase from 66% to 77% of policies in areas benefiting from demountable defences including flood cover. Increasing the provision of flood insurance to households in areas protected by schemes containing demountable defences is a topic which is subject to ongoing discussions between Insurance Ireland, the Department of Finance, and the OPW.
Finally, the Deputy should be aware that a consumer can make a complaint to the Financial Services Ombudsman in relation to any dealings with a Financial Services or Insurance provider during which they feel they have been unfairly treated. In addition, individuals who are experiencing difficulty in obtaining flood insurance or believe that they are being treated unfairly may contact Insurance Ireland which operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to insurance.
