The floods minister, Richard Benyon, is to meet the All Party Parliamentary Group on Insurance & Financial Services on Tuesday 12 March.
The talks between the insurance industry and the government on flood insurance and a replacement for the decade-long stand-off called the Statement of Principles may resemble a chaotic battlefield but an eleventh-hour resolution to the conflict is in sight. Richard Benyon, Parliamentary Under-Secretray for Natural Environment, Water and Rural Affairs, will be speaking to the All Party Group on Tuesday 12 March. It is very hard to believe that he would have agreed to do this if the environment department (DEFRA) was not confident that it would have something firm to announce by then.
What isn't very clear is just how much consultation there will be with the insurance industry before this announcement as the smoke of battle still seems as thick as ever. Only this morning the Association of British Insurers' Nick Starling was speaking at a Labour Party flood summit and was unable to cast much light on where the talks that crumbled into disarry and acrimony at the end of last year now stand. Both Labour and Tory MPs fear that the talks are stuck at the stand-off stage.
What we do know is that the ABI chairman, Otto Thoresen, has been discussing the issue with the Cabinet Officer minister Oliver Letwin to try to find a way forward. How far this means the ABI are going to be a party to any replacement scheme is unclear but it is very hard to see how this issue will be resolved without the industry's involvement. The one option that could cut out the industry – a totally state-sponosred and Treasury-funded scheme – would surely be politically unacceptable to a Tory-led Coalition government.
We shall see what emerges from DEFRA between now and 12 March.
The inclusion of the meeting with Richard Benyon in the APPG programme has necessitated a re-jigging of some of the other planned meetings in this session.
Direct Line did not anticipate such a severe discount rate cut, leading to a blow to profits of up to £230m, the company said.
The discount rate cut will add between £140m to £175m to Admiral’s claims settlement bill, the insurer said.
Elizabeth Truss, Lord Chancellor and Secretary of State for Justice, has decided to implement the Ogden discount rate at minus 0.75%, a change from plus 2.5%.
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