EU regulators approve Flood Re
The European Commission has approved Flood Re, the UK Government’s scheme to pool flood risk.
The scheme ("Flood Re") will set up a pool to provide reinsurance for the flood risk element from those households deemed at high risk of flooding. It will be funded partially by an industry-wide levy, which may confer an economic advantage to the pool over its competitors and involve state aid.
“However, the Commission has concluded that the scheme is compatible with EU state aid rules, because such insurance cover might not otherwise be sufficiently available on the private market, and the scheme remedies the market failure without unduly distorting competition,” said the Commission.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Today's decision ensures that insurance coverage against high flood risks is available at affordable prices to those UK citizens who need it most, because they live in regions vulnerable to flooding. It is a great illustration of how the Commission and Member States can work together to design effective aid measures that contribute to important public policy goals."
