Mary Harney (Dublin Mid West, Progressive Democrats)

These related amendments clarify an issue that was raised on Second and Committee Stages relating to contracts and the renewal of contracts. The definition of "effect" covers both entering into a contract and any renewal of a contract. The definition of "information return" is also provided.

I appreciate the points made by Deputies opposite. The solvency ratio is determined by the independent Financial Regulator, and the corresponding figure is substantially lower in other countries. It is the case that any company regulated in any other European Union country can do business in Ireland and be regulated at a lower solvency ratio. Neither I nor the Minister for Finance has any role in this matter.

It is a prerequisite for authorisation that VHI or any other company with an older membership profile be able to obtain transfer payments by way of the provisions in this legislation from those with a younger membership profile. That is the first step. However, even with those measures in place, if we maintain the 40% solvency requirement VHI will require an injection of capital. I anticipate that the authorisation issues will have been dealt with before the infringements take effect. I do not know what the gestation period will be but generally, in regard to issues such as these, we are looking at a period of 18 months to 24 months.

We have provided in legislation for the VHI to be authorised by 1 January 2009. If I had not extended that timeframe, the VHI would have gone under, with serious consequences for its 1.5 million customers. These provisions are necessary to ensure that younger people support older people and healthier people support sicker people. There is nothing more than that involved in this legislation. Its provisions will be valid for three years and we hope in that period to put into effect appropriate risk equalisation legislation. However, given the decision of the Supreme Court, this is the only way we can effect change in the short term.

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