Frances Fitzgerald (Fine Gael)

I move amendment No. 5:

In page 3, before section 2, to insert the following new section:

"2—The Board should be solvent and prove itself to be so before any additional powers are vested on it so to ensure fair competition within the market.".

This relates to the solvency issue which the Minister has addressed to some degree. The point we make is that while there is a requirement on the VHI to consider reaching normal solvency levels by considering its pricing, no date has been set for this to be achieved. This is crucial as the primary obligation within the Act is diluted if no date is provided. For example, it is very different to have to price to be solvent by 2008 rather than by 2012. Again, the date needs to be inserted.

There is provision, obviously, for the Minister to issue a date setting out the date to attain solvency and we believe this is important. The new Bill allows the VHI to have subsidiaries, as the Minister has said, but it is not clear how these will interact with the parent company and, in particular, how they will be capitalised and what should occur if they face financial difficulties, for example. Allowing the VHI to have subsidiaries in itself poses a number of regulatory and competition difficulties as again it creates a different regime for the company from that implied to normal insurers. I would be interested to hear the Minister's response.