Mr. Chris Anako:

On behalf of Study and Protect I thank the members for their time and for the invite. We are the leading provider of learner protection insurance in Ireland. Our policy is underwritten by Hiscox, which is one of the largest insurance companies in the world and has a AA financial rating. To date, since we introduced our policy, we have insured 50,000 students and in excess of €100 million in course fees.

I wish to make three points on the submission that we have submitted but all concern the learner protection fund. First, I refer to the set-up. There is a bonding arrangement between the private colleges and the language schools that is underpinned by a sinking fund. This is the only means for colleges to provide learner protection insurance. They would be unable to source a solution from the private sector. Of course this scheme would be administered by QQI. While QQI is, without doubt, fully qualified to administer quality assurance we do not believe that it is capable of administering a sinking fund because that would require a full restructure of QQI. Experience and resources would be required such as underwriters, actuaries, loss assessors, etc. QQI would have to restructure and become a regulated insurer. We have done our homework on the Australian model and it provides extensive reinsurance.

Essentially, it is very expensive to put together, not to mention the administration costs associated with it.

Last year when a small English language school in Limerick closed, 150 students were affected. It cost us €250,000 to settle. We had the insurance policies in place to cover the matter. We consider our policy to be fit for purpose in that regard and did exactly what we said we would do. In addition, there is always negative media attention when it comes to school closures and in that case there was. However, the shining light was the clean-up, what we managed to do in getting the students into a new school within four days, something which had never been done previously.

The next aspect is the annual charge, which would be a lump sum. It is proposed that an annual charge be paid into the learner protection fund by all members. The feedback we are getting from our clients is that they do not know how much they would be expected to pay into the fund considering that they would not be allowed to source a private solution. They are quite happy with our policy as it is. On the timing and method of payment, the payment would be required at the beginning of the year. It would be an upfront lump sum payment. That would affect cash flow. The majority of businesses close owing to a lack of cash flow. Our policy is competitively priced. It remains the most competitive price in the higher education sector.

On the layout and how it would work, it is creating a system that incentivises fraud. That means I could set up a school today and pay the amount into the fund at the start of the year. I could then recruit all of the students and, knowing quite well what I was doing, mismanage the way we were working. We could essentially close the school.

I thank members for their time and look forward to their questions.