19 March 2014 Insurance

Ireland proposes flood levy

The Irish Government is said to be considering an additional levy on all non-life insurance policies to create a distress fund for those who have been denied flood insurance.

The proposed levy will add one percentage point on all motor, home and other non-life policies.

The suggested levy follows criticism from Environment Minister Phil Hogan, who is “disappointed” with the industry’s efforts to provide solutions for those affected. However, the Irish industry organisation Insurance Ireland says that it has been working constructively for the past 12 months to establish a solution.

“We are surprised and disappointed with Minister Hogan’s comments in relation to a proposed levy on non-life insurance policies. Insurance Ireland and the Office of Public Works (OPW) have been working constructively over the past 12 months, at Insurance Ireland’s initiative, to establish a Memorandum of Understanding to allow both parties to share flood data for the first time. The aim of this initiative is to ensure that insurers have up-to-date data on flood defence schemes carried out by the OPW, as well as future schemes, so that insurers can take this information into account when assessing risk,” said a spokesperson for Insurance Ireland.

The organisation says that over the past ten years, Insurance Ireland members have paid out approximately €750 million in claims relating to nine major flood events that have occurred.

“Insurance Ireland will continue to work closely with the OPW and the Government on the above matters. The increased frequency of flooding in recent years highlights the need for action to be taken now in the affected areas so that the necessary flood defences are constructed as quickly as possible,” they added.

In spring 2013 it was estimated that up to a quarter of a million people are affected by denied flood insurance – a figure which is likely to increase after one of the worst winters on record.

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