With just eight months left before an industry agreement to provide insurance to homes at risk of flooding runs out, insurers and government officials appear to remain at loggerheads.
At the moment insurers are committed to offering flood insurance to all homes except those at the most extreme risk. That deal was reached in return for the government committing to spending more on flood defences. Original plans to renew the deal fell apart when insurers accused the government of failing to meet that commitment thanks to spending cuts.
In a bid to reach a new deal, the insurance industry proposed a different system known as Flood Re. This would mean that all home insurance customers would pay a levy on their policies, perhaps of around £20 a year. This money would be specifically earmarked for settling flood claims, the idea being that the extra cash might encourage new insurers to move into the market.
The hold-up is that the proposal would mean the government committed to footing the bill if insurers need to pay out more money than the fund provided. While the government isn't commenting on the issue, insiders suggest officials are unwilling about making what would be an open-ended commitment of public money, even if there was a good chance it might never have to stump up the cash.