Flood insurance scheme is put on ice

The insurance industry had hoped the £180m-a-year scheme would be fully approved before 7 May

Click to follow
The Independent Online

Ministerial sign-off for a long-awaited flood insurance scheme has been delayed until after the general election.

The insurance industry had hoped the £180m-a-year Flood Re would be fully approved before 7 May, averting the risk of ministerial change, which could lead to a reconsideration of how the scheme works. Flood Re subsidises home cover for people living on floodplains, so insurers can offer them affordable premiums.

Environment department officials are currently making sure that Flood Re has all the necessary paperwork in place, such as being registered with Companies House and compliant with Financial Conduct Authority regulations. It is supposed to be launching formally this summer, but an industry insider said he was concerned that the organisation will not now be fully operational until the end of the year. 

The source described the latest delay as an “irritation”.

Insurers and the Government have been locked in negotiations for years on a  replacement for the previous flood cover system, which proved costly to an industry already annoyed by the lack of flood barriers being built by the State.

Aidan Kerr, Flood Re’s chief operating officer, said: “The finalisation of the regulatory processes, including Parliament passing the secondary legislation and the designation of Flood Re by the secretary of state, will take place after the election, but will be done in parallel with the completion of Flood Re’s build phase. We will continue to work flat out in 2015 to ensure we get this world-leading flood reinsurance scheme right first time.”

Comments