Mary Harney (Dublin Mid West, Progressive Democrats)

I move amendment No. 2:

In page 4, line 36, to delete "enter into" and substitute "effect".

I will deal with the issues raised and I will discuss my own amendments also.

I do not say this, as I mentioned last night with regard to another matter, in a complaining way, but when the market was opened up, rightly, on foot of EU directives regarding other health insurers, the issue of the VHI should have been dealt with at that stage. Unfortunately, it was not. Since then it has remained the case that the VHI is not in a position to be authorised. It could not and would not be authorised unless, in a community-rated market, there was a transfer of resources from younger to older people. That is precisely what this legislation is seeking to do. It is a prerequisite for the authorisation of the VHI.

The EU approved this legislation and regards it as a justifiable state aid. It made the point that the issue of authorisation is dealt with differently under Internal Market rules. I brought legislation through this House to provide for the authorisation of the VHI, and it was to be authorised by the start of this year. However, because of the risk profile of its members, it is not possible, without the provisions of this legislation, even to apply for authorisation. In addition, as I said at the committee, it needs capital, and if this is to come from the State, EU approval is required. The process of approval could take 18 months because that too comes under state aid rules, and it may be found not to be appropriate. The Government must discuss all these issues with the company.

I agree it is unfair that the company is not authorised but it is not possible to do that without a transfer of resources from younger to older people. That is the policy that has been supported by successive Governments. The initial risk equalisation scheme was brought in by the parties opposite, not by me. We have sought over many years to try to introduce it and we have been stopped at every opportunity because companies have engaged in litigation.

This Bill is seen as the most appropriate way to achieve our ends; it is time-limited to three years and is being done by way of a stamp duty on the companies and a tax credit to the individual members. I appeal to Members to co-operate with the passing of this legislation because not doing so will serve no purpose if they want to support community rating and the concept of younger people supporting older people. Even in the USA insurers now want a form of transfer, as they do in the Netherlands, which is held up as an example here, and other countries. There is no country that has community rating without risk equalisation and younger people supporting older people. It would be impossible otherwise.

There are two separate issues here. What the Deputies opposite seem to want is that the provisions of this Bill would not be enacted until authorisation takes place. It is a chicken and egg situation. They cannot be authorised without the provisions-----

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