Slow negotiations could delay planned 2015 implementation, according to reports
Drawn-out negotiations could delay the implementation of Flood Re by up to a year, sources have told the Financial Times.
The FT quotes one person familiar with the talks as saying negotations have been “painfully slow”.
“The thrust of the problem is the lack of a proper chief executive,” the source said.
Those involved in the negotations said they had become increasingly politicised and that the scheme could miss its planned summer 2015 launch. There was no suggestion that the scheme would be axed.
Flood Re would cap the cost of insurance for about 200,000 homes in flood-prone areas and be paid for by a levy of £10.50 on every home insurance policy in the country.
The FT reports that negotiations have been drawn out over whether the industry or government would pay if there were a catastrophic flood in the early years of the scheme, before the pool is big enough to pay claims. Progress has been made by the industry agreeing to provide an equity capital injection.
Another sticking point has been who would be entitled to any surplus funds when Flood Re is eventually wound up.
“The timeline is ambitious, but everyone is working hard to deliver for summer 2015,” the ABI said.