Written answers

Wednesday, 16 June 2010

Department of Health and Children

Voluntary Health Insurance

7:00 pm

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 126: To ask the Minister for Health and Children the timeline for the injection of funds into the VHI to enable it to meet its solvency requirements in advance of privatisation; the level of funding she expects to have to inject into VHI before its privatisation; and if she will make a statement on the matter. [25621/10]

Photo of Mary HarneyMary Harney (Dublin Mid West, Independent)
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A key element of the Government's strategy for the future of the private health insurance market is to establish VhI Healthcare in a position where it is authorised by the Financial Regulator and therefore regulated for prudential solvency purposes on the same basis as its competitors. The Government has committed to making a substantial capital investment into the VHI in order to secure its authorisation as a matter of urgency. The procedure for authorisation necessitates that VHI not only have sufficient capital in place to satisfy the requirements of the Financial Regulator, but also to display that it can sustain the necessary capital over a three to five year period. This will require VHI to demonstrate that it has a robust business plan in place which will satisfy these requirements. As Minister responsible for the VHI, I and my officials will be in close contact with the Board and management to ensure that such a business plan will be in place.

The actual amount of capital which will be required will be determined between the Minister for Finance and the Minister for Health and Children in light of the advice of experts. The level of capital required will be affected by a number of issues, including the amount of reinsurance and/or subordinated debt which the VHI may secure. It is not possible to specify precisely at this time what the figure for capitalisation will be. The timing for capitalisation and sale of VHI will depend on a number of factors, which will be decided by Government in light of the advices of the experts on the appropriate sequencing and structure of the disposal of the company. These experts will be appointed on foot of a competitive tendering exercise which I expect will take place shortly.

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