Mr. Liam Sloyan:

Deputy Kelleher asked about the aspects that contribute to health insurance premium inflation. In recent years the premium inflation has been driven by claims inflation and the claims inflation market has largely been driven by an increase in hospital utilisation.

The other key aspect we like to talk about in terms of premium inflation is that the rate of inflation has been very different across different sectors of the market. Plans that have been around for a long time and that are mostly held by older people have increased greatly in price whereas many younger, price conscious people have switched to similar plans offering very similar benefits but at much lower costs.

That is often characterised as downgrading but many of those people get the same or better benefits for a much lower price. The price reflects the people who have bought that product rather than the level of cover provided by the product.

A third aspect of premium inflation we would like to mention is that the primary role for controlling claims costs lies with the insurers but as legislators and policymakers we have an important role also to ensure the focus of insurers is on areas like claims inflation and efficiency and not on risk profile management. Currently, it is far more profitable for an insurer to concentrate on managing its risk profile selling different products to young people and different products to older people. That is the way one makes money without a strong risk equalisation system but with a strong risk equalisation system that avenue for profitability will not exist. It will be all about more normal insurance practices such as controlling one's claims costs. It is important that we, as legislators and policymakers, develop the system to ensure that is where the focus lies.

Deputy Ó Caoláin asked about our role regarding issues arising between insurers and public hospitals. The role of regulators is largely to address the symmetries. A consumer is in a much less powerful position in dealing with an insurer, and we regulate the insurance market in respect of protecting health insurance consumers. We do not regulate the health care market. It is a matter for health care providers and insurers to deal with matters between them in regard to that type of issue.