PLANS TO bring the State’s largest health insurer, the VHI, under the regulation of the financial regulator – a move that could require an investment of up to € 200 million – have been postponed by the Government for more than 18 months.
Minister for Health Mary Harney has set a new date of January 1st, 2012, for the VHI to accrue the capital reserves required for authorisation.
This is at least the fourth deadline set by the Government for such a move. All previous deadlines have been missed.
In a statement the Minister said: “I have been working with officials and advisers on the full range of matters relating to the private health insurance market.
“I am bringing a comprehensive package to Government shortly and I will be making a further announcement at that stage.”
The Government, which faces court action by the European Commission for failing to implement an adequate regulatory regime to oversee the State-owned VHI, had initially set a date of last September 1st for the State-owned company to be authorised by the regulator – a deadline that was later extended to December 31st and subsequently to March 31st.
There has been strong speculation that among the options under consideration by the Government for generating the level of funding required to allow for VHI to be authorised would be to put in place a full or part privatisation of the company.
The VHI benefits from an exemption from the general insurance supervisory regime established by two EU non-life insurance directives, even though the firm has expanded beyond the health insurance market.
This means it does not have to meet some obligations required of its rivals in the Irish market, such as setting aside reserves for a minimum guarantee fund and meeting solvency levels.
Ms Harney said earlier this year that the Government was addressing the issue of having a level playing pitch for all health insurers and ending the VHI’s special derogation under directives on insurance from prudential regulation by the regulator. The Government had decided the VHI should be in a position to attain authorisation from the regulator and satisfy its prudential requirements as soon as possible, she said.
