Paul Kehoe (Wexford, Fine Gael)
Link to this: Individually | In context

Question 74: To ask the Minister for Health and Children if the VHI fulfilled its legal obligation to achieve solvency by the end of March 2010; if the EU Competition Commissioner has contacted her concerning possible legal action and sanctions if the VHI does not meet the requirements of the Financial Regulator regarding appropriate levels of solvency; and if she will make a statement on the matter. [20277/10]

Mary Harney (Dublin Mid West, Independent)
Link to this: Individually | In context

Arising from a derogation under the Non-Life Insurance Directives, VHI continues to be exempt from prudential solvency requirements. The Voluntary Health Insurance (Amendment) Act 2008 provided for the VHI to acquire sufficient funding in terms of its capital reserves to enable it to make an application to the Financial Regulator for authorisation. The date originally fixed by that Act was 31 December 2008, but this was subject to the right of the Minister to appoint a later date by Order, if satisfied that there is good and sufficient reason for so doing. At the time the original date was fixed, the Supreme Court had not yet ruled in relation to the risk equalisation scheme, which it struck down in July 2008. Since then I have extended the date by which the VHI must accrue the necessary reserves on five occasions. The date is now 1 January 2012. However, it remains my firm conviction that VHI should be properly authorised and that the derogation should be lifted.

The EU Commission has commenced proceedings against the State in the European Court of Justice regarding the VHI's derogation. The State has forwarded a comprehensive written defence to the Court. The matter of sanctions would only arise in the event of an adverse judgment if nothing was then done to ameliorate the situation and further proceedings were then brought to seek financial penalties against the State.

The capital position and authorisation of the VHI are only two of many inter-related and complex issues that need to be resolved in order to achieve a stable community-rated private health insurance market.

I have been examining the broad range of issues involved with my officials, expert advisers and the Health Insurance Authority. The matter has also been considered by the Government on a number of occasions since the Supreme Court Judgement. I will make a full statement at the appropriate time on the measures required to support the Government's key policy goal of a community-rated health insurance market.