The Insurance Council of Australia (ICA) has written to the Campaspe Shire Council in northern Victoria urging it to reconsider a decision to approve the construction of 16 townhouses on flood-prone land near the Murray River.

CEO Andrew Hall wrote to Mayor Rob Amos on Tuesday to raise concerns about the proposal after ABC News reported that the council had approved the development in an area of Echuca that was inundated during last year’s flooding.

“The Insurance Council of Australia has long advocated for changes to planning rules so no more homes are built in high-risk flood-prone locations and has urged Campaspe Shire Council to reconsider this decision,” ICA said in a statement provided to insuranceNEWS.com.au.

“The Insurance Council of Australia looks forward to a response from Campaspe Shire Council.”

The ABC has reported that the $4.7 million development proposal at 166 Bowen Street is on the unprotected side of a temporary levee and the area went under water in October.

Campaspe Shire Council CEO Pauline Gordon said a planning permit was issued by the council, in its capacity as responsible authority, following the outcomes of a proceeding at the Victorian Civil and Administrative Tribunal (VCAT).

“The planning permit decision was made in full compliance with the Campaspe Planning Scheme which included reference to the Campaspe Local Floodplain Development Plan,” she told insuranceNEWS.com.au. “At this time council has no further comment on the matter.”

ICA says it has long called for councils to stop approving homes on floodplains, “and this sometimes includes direct advocacy to local governments”. 

The North Central Catchment Management Authority and some residents had sought to take action through VCAT, but the application was dismissed in July.

Flooding across Victoria, NSW and Tasmania last October caused insured losses totalling $736 million, with 22,151 claims lodged. Northern Victoria communities were affected along the Campaspe, Goulburn and Murray Rivers, including the towns of Shepparton, Rochester and Echuca.

ICA will be holding another round of community consultations in Melbourne and northern Victorian next week, visiting Maribyrnong, Mooroopna, Moama, and Rochester. It has previously visited Echuca.