The Association of British Insurers (ABI) has criticised the proposed financial management of the Government’s flood insurance pool, as consultation on draft regulations begins.

The Flood Re scheme, due to be launched next northern summer, aims to ensure high-risk properties have access to affordable cover, through subsidies from a levy on all policyholders.

The Water Act 2014 has already set a framework for the scheme, but proposed regulations relating to funding and administration have now been published.

The Government has launched a consultation that will run until September 16.

The ABI supports the pool in principle, but Deputy Director-General Huw Evans told insuranecNEWS.com.au the draft regulations are “critical to how Flood Re will work in practice”.

He says the rules on financial management “are not agreed with the industry and would be unworkable if passed into law in the current state”.

Some progress has been made in discussions, but Mr Evans says more must be done.

“It is critical that these issues are fixed during the consultation phase in the coming months if we are to deliver a privately run but publicly accountable Flood Re that can work smoothly for the benefit of customers in high-risk flood areas and succeed in gaining regulatory authorisation as a sustainable insurance vehicle.”