I move: "That the Bill be now read a Second Time."
In 2021 a report from Gamma location services identified some 70,000 homes in Ireland are at risk of flooding which could result in an estimated cost of approximately €2 billion.
In a contribution to the 2019 Department of Finance public consultation on climate change and insurance, a member of the Scottish Environmental Protection Agency described flood insurance as one of the key indicators of community flood resilience.
In the years and decades ahead, there can be no doubt of the enormous challenges that communities will be forced to face as a consequence of climate change. Its impact will be felt across all of our lives. Government will be challenged over the coming years to address its impact across a range of areas.
In Ireland, our primary challenge in respect of coping with extreme weather events that will impact directly here in Ireland will be in dealing with the impact of flooding. Over the past number of decades and across the length and breadth of the State, we have witnessed communities facing devastation, often repeatedly, resulting from extreme weather events leading to flooding.
Flooding has an absolutely devastating impact. It leaves families with homes, possessions, and family heirlooms destroyed. Businesses see their premises devastated, their stock destroyed, with companies often being left unable to fulfil orders due to the disruption caused by flooding. The responsibility of formulating a cogent and effective response lies with the Government. We are all no doubt aware this will require a multifaceted approach and one that includes rigorous planning, the maintenance and management of our rivers, and the completion of flood relief schemes, many of which are ongoing, along with many more areas of work.
The Government has neglected to address the glaring issue of the provision of insurance cover to homeowners and businesses in flood-affected areas where the Office of Public Works has carried out remedial work. This means that Deputies, such as myself, have no recourse other than to bring forward legislation in a personal capacity in an attempt to address this striking anomaly.
It is the purpose of this legislation to seek to establish fairness in the market for property owners in the provision of building insurance and to provide for related matters. The current blatant and unwarranted state of unfairness needs to be addressed. At this point in time, under current conditions, the situation across this State exists where there is unreserved discrimination against private and business property owners in flood-affected areas. This is despite the fact that following a 2007 EU directive, the Office of Public Works, OPW, was tasked with completing flood relief schemes to the necessary specification leading to remedial work being carried out by it to mitigate flooding.
Since 2018, the Government has committed €1.3 billion to 2030 under the national development plan to deliver some 150 additional flood relief schemes identified as part of the OPW’s Catchment Flood Risk Assessment and Management, CFRAM, programme. This partnership between the OPW and local authorities throughout the State has led Ireland to treble, to a figure of 98, the number of flood relief schemes currently at design, development, and construction stages.
Since 2018, the Irish taxpayer has funded flood relief schemes to the value of €296.2 million. That has to be welcomed. Those flood schemes have been undertaken right across the State, stretching from Donegal to Cork and from Galway right across to Wicklow. While these figures and an expenditure of just under €300 million sounds impressive, it is substantially less than what is required to keep pace with what has been committed to by the Government. These schemes are designed to provide one-in-100 years or more protection against flooding. They are welcome, necessary and right.
While, as I said, funding levels must be increased, the speed of roll-out needs to be accelerated alongside this. The impact of the investment to date has proven that it is possible to provide significant levels of protection against flooding for homeowners and businesses with the appropriate level of planning and funding.
Despite this substantial investment of taxpayers' moneys by the State, the insurance industry has refused to provide cover for homeowners in some of the areas where relief works have been completed. This is having a very real and detrimental impact on local communities.
In my home town of Bray, I have met and talked with, and campaigned alongside, many individuals who reside in flood-affected areas. I have witnessed their despair, frustration and anger first hand.
In 1986 Hurricane Charley devastated the State and, indeed, County Wicklow, flooding and damaging not just homes, but also dozens of businesses in the Little Bray area. More than 350 jobs were put at risk because of the flooding that followed the storm. It was as a result of a campaign, which like many more across the country ran for many years afterwards as ordinary people and small business fought to preserve their homes and livelihoods, that the river Dargle flood protection scheme, in which the OPW carried out remedial work to the cost of €46 million, was completed in 2017.
I acknowledge and applaud the efforts of groups, such as SWAP, the community of Little Bray and the Office of Public Works, which spearheaded the works. The failure of the insurance industry to provide insurance cover to homeowners in flood-affected areas that have been remedied is simply outrageous and is totally unacceptable.
This legislation, which I have moved on Second Stage, will end this unfair practice by the insurance industry and will prevent it from continuing with its discriminatory practices against homeowners and businesses. This legislation will offer protection to homeowners and businesses situated in areas the OPW has designated as having a one-in-100 years risk, or more.
The legislation will offer further protections by entitling property owners to bring forward complaints to the Financial Services and Pensions Ombudsman if they believe insurance companies attempted to overcharge for premiums or if they believe they were unreasonably denied insurance. The legislation will empower the Central Bank to carry out assessments of individual insurers and how they deal with insurance applications from property owners in the affected areas. It will also allow the Financial Services and Pensions Ombudsman the authority to direct an insurer to offer insurance to customers at a price and on terms it deems fair, reasonable and appropriate.
Flood insurance is not only a matter for homeowners. As important as that may be, fair and equitable insurance is critical to the existence and expansion of local businesses. I previously spoke in the Chamber about the closure of local businesses in County Wicklow and across the State due to extortionate insurance fees, which saw their insurance premium jump from €26,000 to an incredible €88,000 per year. The simple fact is that without insurance cover, businesses cannot survive. Without business and commerce, our communities will not survive either. Ordinary homeowners are most at risk and are being unduly and unfairly punished and discriminated against by insurance companies. Without legislation and the means to compel fair play, the insurance industry will not act. It is our responsibility in the House to act to protect property owners in flood-affected areas. The insurance industry is acting in bad faith. The very least home and small business owners deserve to expect from the insurance industry is that they reciprocate the efforts of local communities and the State and provide insurance to those in affected areas in which remedial works have been carried out. The failure to provide insurance in these areas damages the financial well-being of localities and endangers the very viability of the businesses themselves. Businesses have been left in a situation in which they are often unable to secure finance due to a lack of insurance cover, curbing growth and potentially leading to closure and the loss of jobs in many communities. There are further impacts when new industries looking for potential sites for development are forced to avoid the areas for which insurance companies refused to provide cover. That impacts the growth and development of many communities.
Homeowners are left in a position in which they are forced to sell their homes and leave in search of work because businesses in the area have failed. The ability to close the deal on their homes could be halted because they could not secure insurance for their homes. The impact of the actions, or lack thereof, by these insurance companies has a detrimental impact on the health of homeowners and forces them to incur substantial and often severe financial penalties as a consequence.
Whole parts of the State have been designated as black spots by the insurance industry. This legislation will end this unfair practice. The Bill will make it unlawful for the insurance industry to wilfully discriminate against homeowners and businesses in communities in which there is now a low probability of flooding as a result of remedial work.
When I use the term "low probability", I refer to the OPW's designation of an area having a one-in-100-years flood risk. It will prevent the insurance industry from continuing its discriminatory practice against homeowners and businesses and offers further protections by entitling property owners to bring forward complaints to the Financial Services and Pensions Ombudsman if they believe the insurance companies attempted to overcharge for premiums or if they believe they were unreasonably denied insurance. The Bill, as I outlined, will also prevent the insurance industry from enforcing discriminatory practices against homeowners and businesses in areas designated by the OPW as flood-risk areas.
The Bill also seeks to prevent discrimination in the offering and pricing of insurance policies to persons affected by insurance companies. It will also allow for individuals to take complaints to the Financial Services and Pensions Ombudsman, which will have the authority to direct an insurance company to offer insurance to a complainant at a rate it has deemed fair and appropriate. The Central Bank will have the authority to carry out an assessment to determine that an insurance company is acting or has acted in compliance with this legislation. The Central Bank can further direct an insurance company to take steps it deems appropriate to ensure the company complies with the provisions of the Bill and it can apply for an enforcement order to force an insurance company to comply with directions from the Central Bank if the company is in breach of the terms of this Bill. The High Court, ultimately, will be able to issue fines to an insurance company, in accordance with the Bill.
I wish to end by making a further argument regarding the need for independent data. For far too long, the Government has relied on information supplied by the insurance industry, the veracity of which has been repeatedly challenged. We need independent data to be made available which will allow the claims of the insurance industry to be challenged and will expose its policy towards those who have been wrongfully denied insurance for their homes and businesses, despite meeting a rigorous level of flood protection - the one-in-100-years threshold, or better, for risk of flooding. I ask the Government not to put forward its amendment and I ask all Deputies to support this long-overdue legislation.