Mary Harney (Dublin Mid West, Progressive Democrats)

The object of these major amendments is to provide for the transfer of the health insurance activities of the present VHI board to a subsidiary company to be established for this purpose. The new section proposed in amendment No. 19 consists of a provision to enable the Minister to set a date for the transfer to take place. The new section proposed in amendment No. 20 provides for the transfer of the health insurance business and health related insurance schemes to the subsidiary to be established for that purpose.

This statutory provision is required for this transfer because the VHI board, as a State body rather than a conventional commercial insurance company, is not covered by the Insurance Acts which would otherwise apply. It is linked to the amendment to section 2 and the rights of members and staff are not affected in this instance. It has the added advantage of not requiring the approval of the High Court. The process of securing High Court approval for the transfer is long and complex. It is also not without some risk as it would allow parties which might claim to have an interest in the transfer to intervene. These could include disgruntled VHI policyholders or competitors. If this were to happen, it could seriously threaten the objective of having the VHI authorised by the end of next year.

The new sections 8, 9, 10 and 11 are standard provisions governing the process of transferring business. The new section 12 will allow the Minister to appoint a day on which staff will be transferred from the VHI board to the services company subsidiary to be established for the purpose of employing the staff of the group and its subsidiaries.

The new section 13 sets out the conditions under which the existing staff of the VHI board will be transferred to the new services subsidiary or any other subsidiary established by the board. Although the present intention is that all staff be transferred to the service's subsidiary, the section gives the board a degree of flexibility in having the power to transfer staff to another subsidiary if it so decides. Section 13 also provides statutory protection for the terms and conditions of employment of existing VHI staff. While the board has indicated it has no plans to recruit new staff on less favourable terms than those already applying to existing staff members, these provisions would not prevent it from doing so. Amendment No. 33 is a consequential technical amendment.