The Flood Reinsurance (Amendment) Regulations 2025
These regulations amend the 2015 Flood Reinsurance regulations, raising the total levy from £135 million to £160 million.
This increase aims to improve the affordability and availability of flood insurance in high-risk areas.
The amendment applies to England, Wales, Scotland, and Northern Ireland and took effect on April 1st, 2025, without affecting existing liabilities.
Arguments For
Increased Flood Reinsurance Capacity: The increase in the levy provides greater financial resources for the flood reinsurance scheme, potentially expanding coverage and lowering premiums for homeowners in high-risk areas.
Improved Affordability of Home Insurance: By increasing the capacity of the scheme, the legislation may contribute to making flood insurance more affordable and accessible to those living in flood-prone regions.
Parliamentary Approval: The regulations have been approved by both Houses of Parliament, signifying a democratic process and broad acceptance of the need for amendment.
Protection of Existing Liabilities: The amendment explicitly states it does not impact pre-existing liabilities, ensuring existing obligations remain unaffected.
Arguments Against
Increased Burden on Insurers: The higher levy could place a greater financial burden on insurers, potentially resulting in higher costs for all policyholders, even those not in high-risk areas.
Potential for Inefficiency: The increase in funds may not be efficiently utilized in providing greater flood mitigation or insurance benefits, leading to wasteful spending.
Lack of Detailed Impact Assessment: The absence of a full impact assessment raises concerns about the potential consequences for the private, voluntary, and public sectors.
Limited Transparency: The brevity of the regulations themselves could lead to questions or uncertainty regarding their implementation and long-term effects.
- Citation, commencement and extent (1) These Regulations may be cited as the Flood Reinsurance (Amendment) Regulations 2025 and come into force on 1st April 2025. (2) These Regulations extend to England and Wales, Scotland and Northern Ireland.
This section details the title, effective date, and geographical scope of the regulations.
The regulations are titled the 'Flood Reinsurance (Amendment) Regulations 2025' and came into effect on April 1st, 2025.
They apply across the entire UK.
- Amendment to the Flood Reinsurance (Scheme Funding and Administration) Regulations 2015 (1) In regulation 8(2)(a) of the Flood Reinsurance (Scheme Funding and Administration) Regulations 2015, for “£135 million” substitute “£160 million”. (2) The amendment made by paragraph (1) does not have the effect of altering or extinguishing any obligation or liability arising prior to the date on which these Regulations come into force.
This section outlines the central amendment.
It increases the funding for the flood reinsurance scheme.
The amount specified in regulation 8(2)(a) of the 2015 regulations is changed from £135 million to £160 million.
This change excludes liabilities existing before the effective date of these regulations.
We consent Anna Turley Vicky Foxcroft Two of the Lords Commissioners of His Majesty’s Treasury 18th March 2025 Emma Hardy Parliamentary Under Secretary of State Department for Environment, Food and Rural Affairs 19th March 2025
This section contains the signatures and endorsements from representatives of the Treasury and the Department for Environment, Food and Rural Affairs, signifying their approval of the regulations.
EXPLANATORY NOTE (This note is not part of the Regulations) The Water Act 2014 (c. 21) includes provision designed to promote the availability and affordability of home insurance in areas of high flood risk. These Regulations make amendments to the existing Flood Reinsurance (Scheme Funding and Administration) Regulations 2015 (S.I. 2015/1902). Regulation 2 amends the total levy figure to £160 million, increased from £135 million. It provides that this change is made without prejudice to liabilities and obligations that applied prior to the coming into force of these Regulations. A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, voluntary or public sector is foreseen.
The explanatory note provides context; it references the Water Act 2014, which aims to improve access to affordable flood insurance.
The note explains the amendment increases the levy from £135 million to £160 million, without altering pre-existing liabilities.
Finally, it notes no significant impact assessment was conducted.