Michael Noonan (Limerick East, Fine Gael)
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Question 72: To ask the Minister for Health and Children if the EU has commenced proceedings against the State in the European Court of Justice regarding the VHI's derogation; the position regarding these proceedings in view of the recent announcement in relation to the VHI; and if she will make a statement on the matter. [25831/10]

Mary Harney (Dublin Mid West, Independent)
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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. In the context of the Government's announcement on the 27th May 2010 on the future strategy for the private health insurance market, I have recently extended the date as provided for by the Act, to 1 January 2012. I remain firm in my conviction that VHI should be properly authorised and that the derogation should be lifted.

The EU Commission commenced proceedings against the State in the European Court of Justice regarding the VHI's derogation earlier this year. The State has forwarded a comprehensive written defence to the Court and currently awaits the European Commission's reply to that defence. It should be emphasised that since the State's defence was submitted, the Government has made significant decisions regarding the capitalisation and sale of the VHI. These decisions will form part of any negotiations with the Commission and as part of the State's defence of the proceedings as the case progresses.