Frances Fitzgerald (Fine Gael)

A large number of people have benefitted from the VHI and we owe it a debt of gratitude for the work done over many years. It has served the Irish consumer well and changes to its status would require very careful discussion. However, this does not take away from the fact it raises competition issues which we are discussing. Some of these must be dealt with to open up the market and ensure the consumer can obtain a better deal.

Under normal insurance regulation in Ireland, insurance undertakings are not permitted to have subsidiary companies as they may have a financial impact on the parent company. A group structure of companies is generally formed whereby a parent holding company has a number of subsidiaries, one of which is the insurance undertaking. This parent holding company must be approved by the Financial Regulator as does each new subsidiary company formed. This does not appear to be the case for the VHI which will be permitted to have direct subsidiaries although it will become an insurance undertaking. The VHI will not be regulated as the parent company of these subsidiaries and the creation of these subsidiary companies will not be subject to the approval of the Financial Regulator as is required of a normal commercial insurance undertaking.

It seems different and preferential treatment is afforded to the VHI by the Government. The Minister discussed altering this structure. Will she comment on this because it initially appeared the structure would be different from what would be expected of other companies?