'Too early' for insurance levy decision, says HayesTuesday 18 March 2014 21.59
Minister of State at the Office of Public Works Brian Hayes has said it is too early to say if there will be a 1% levy imposed to help provide insurance cover for householders unable to get flood cover.
He was responding to reports that the Government is considering a new levy on all insurance policies to create a distress fund to help people who are unable to get cover.
The chief executive of Insurance Ireland said his group intended to announce a solution within the next four weeks to address the problem.
Speaking on RTÉ's News at One, Kevin Thompson said his group, which represents insurance providers, had been making progress with the OPW and Mr Hayes, and that a memorandum of understanding had been agreed.
"Ninety-eight per cent of all people with household policies are covered for flood insurance," Mr Thompson said. "So we are talking about 2% of the insured population which are not.
"We would like to bring that percentage figure down, and we would like to put a mechanism in place [...] to allow us to do that."
Mr Thompson said Insurance Ireland had wanted to get data in respect of flood defences put in place by the OPW.
He said insurers, by having access to the flood defence data, would be able to assess on a commercial basis whether or not they would be able to provide cover to those who currently could not get flood insurance.
He declined to give an estimate of how many of these people would then be able to get cover.
Mr Hayes' comments came as he was inspecting a new €1m flood barrier in the Whitehall Estate in Tullamore, Co Offaly.
The Government had a responsibility to try to put flood defences in place and the insurance companies have a responsibility to ensure they provide adequate cover to people, he said.
The minister said it was a matter for the Department of Finance to consider imposition of any levy, but said they would have to make sure it would work.
The fact that people affected by flooding cannot get insurance cover is a major issue for them, he said.
Mr Hayes also said it was his primary responsibility to make sure that when the Government puts flood defence systems in place, that the insurance industry then provides adequate insurance coverage for residents in that area.
However, he said Minister for Finance Michael Noonan has given a commitment to examine the issue and to report to Cabinet colleagues shortly.
The last time it was looked at in 2010, he said, it was a negative result because of the fact the Government was going into a bailout programme at the time.
Mr Hayes said the contingent liability was significant, but a solution has to be found for the people who cannot get insurance cover.