Mr. John O'Dwyer:

We believe that risk equalisation is about 55% effective, but there are many parameters to be considered. We have made our views known. Other views are that it is about 67% or 68% effective. For example, in the minimum benefits as set down in legislation for the past 15 or 16 years - I cannot remember the exact figure - there is an allowance of approximately €500 for a private hospital, where the charge is €750. Therefore, if one applies risk equalisation to the minimum benefits, it is in the region of 60%. We see all the costs, because clearly it is a cost. We will always have scenarios that need to be set out. We just have a different view of how the market will be over the next 12 months; there will always be slight differences in it. Risk equalisation is one of the key reasons.

On the question about the €28 million liability, up to 11 or 12 years ago, VHI had an arrangement that if staff worked their full 40 years their health insurance and that of their spouse was paid for.

That was removed 11 years ago. Even the commitment to the effect that "we will only give it where we can afford it" was recently removed. That has been removed. The VHI has taken many actions to reduce its costs and its administrative cost base, and that was one of them. However, we have also stopped paying increments. I am aware that this matter has been discussed in places quite near to where we now sit but the VHI stopped paying increments a couple of years ago. We have also increased the pension contributions which people make. We have taken many initiatives, including that which relates to the health insurance element.