FYFFES CHIEF executive Jimmy Tolan is set to take over the helm of State health insurer VHI next May.

VHI announced yesterday that Mr Tolan has been chosen as its new chief executive. He will take over after the current boss, Vincent Sheridan, steps down next May.

Mr Tolan has been chief executive of quoted fruit importer and distributor Fyffes since January of last year.

Before that he held the post of corporate development director with the company.

In that role, he was closely involved with the group's two spin-offs, property vehicle Blackrock International Land and distributor Total Produce.

Mr Tolan originally trained as an accountant with KPMG. He holds a B Comm and a diploma in professional accounting from University College Dublin.

VHI chairman Bernard Collins said yesterday that Mr Tolan has experience and a proven track record in running a large organisation. The incoming chief executive is ideally qualified to steer VHI through a process that will ultimately see it regulated in the same way as its competitors, Mr Collins added.

As it is a statutory body, the VHI is not obliged to maintain reserves in the same way as other commercial insurers and does not come under the remit of the State's Financial Regulator.

The Government is committed to changing this.

Mr Sheridan is retiring in May but will remain "available to the business" for a number of months. He has been chief executive since 2001.

It is normal practice for chief executives of State companies to step down after seven years.

Mr Collins thanked Mr Sheridan and said that he had guided the company through an "extremely challenging market".

VHI had a monopoly up to 1996 and still holds about 80 per cent of the Republic's health insurance market.

Fyffes' shares closed 2 per cent lower at 92 cent in Dublin yesterday.