Vol. 481 No. 3
2 Mr. McDowell asked the Minister for Health and Children his views on whether the VHI needs to be restructured; his views on whether the VHI should seek a strategic partner; and if he will make a statement on the matter. [15974/97]
The VHI board made a report to my predecessor which set out, in broad terms, its views regarding a change in its corporate structure. The report was the subject of discussion between officials of my Department and VHI senior management. The arrangement made in these discussions was that VHI would submit detailed proposals on the changes it wished to see implemented with regard to its legal status. I am aware that the board is working towards providing such proposals for my consideration at the earliest possible date.
I am open to considering the question of a strategic partnership in conjunction with the VHI board. However, the Deputy will appreciate that it would be appropriate, in the first instance, to address the issue of a change in the board's corporate status as this is likely to bear on how it should proceed in the matter of exploring a strategic partnership.
I can assure the Deputy that these important and involved matters are currently receiving careful consideration in order that the interests of the VHI's 1.4 million members will be best served.
I offer to the Minister and his colleagues my congratulations on their appointment and wish them well during their tenure in office. The Minister will recall an exchange he had with the former Minister for Health, Deputy Noonan, last March when he sought the then Minister's view on this issue. He was clear as to the role of the then Minister in setting policy. Having listened to his reply I am unclear as to his current view. The programme for Government commits the Government to considering a strategic alliance or partnership. Does the Minister believe that is a good thing and what potential benefits does he see for such a policy?
I thank the Deputy and reciprocate his sentiments with regard to his and Deputy Shatter's spokesmanships. I wish them both well.
The Government will set the policy and will make decisions in this area. I have indicated that before coming to a final decision, the VHI board is due to give me its detailed proposals within the next few weeks as to how it sees the future. I am also insisting, as I have stated publicly since I became Minister, that all options be considered.
The Deputy can be assured that it will not only be the view of the VHI that will be considered, although that should be given its due weight. We must also ensure that there is an assessment of all the options. We must be conscious of the fact that a change in the VHI's corporate status, which is the first issue to be addressed, could involve it in the removal of its exemption under the EU third non-life insurance directive and from the requirement to comply with EU regulations for the authorisations of insurance undertakings.
One of the main advantages seen by the VHI as deriving from a change in corporate status involves freedom from legislative constraints with resulting commercial autonomy and the capacity to enter alliances with suitable partners on other health care products. I have asked VHI management to be aware that we are open in the Department and in Government to considering any developed proposals it makes on the matter of a strategic alliance. When that comes to hand I will take it into account. I will also take other views into account and make a decision.
The Minister says that he is open to all options. Is he, for example, open to the option of selling off the VHI or disposing of a majority shareholding in it?
All options will be considered by me. I do not have any ideological hang-ups as others seem to have. I am interested in ensuring that the VHI provides the most competitive private health insurance it can for its 1.4 million customers, which is their main concern. I will not close off options.
There was an ideological battle, or certainly a confusion, in the last Administration regarding this issue which meant that nothing was looked at. Upon my appointment as Minister I had to sanction a premium increase. I said at the time, and it remains my position, that we must address the fundamental issues within the VHI. We must ensure that it has the commercial freedom to operate in a new competitive environment. It now has BUPA to contend with in this market.
I will look at all the options dispassionately and objectively, get the best possible advice and decide on the best way forward for the VHI. I am not ruling anything in or out.
With regard to the role of the Minister's Department as regulator, does he believe it is appropriate for him and his Department to continue to regulate the insurance industry as long as VHI is in the sole ownership of the State?
The issue raised by the Deputy was confronted by my predecessor also but was not resolved by the last Administration. It will have to be resolved. Now that we are regulators in a competitive market there is no longer any question of a private health monopoly providing private health insurance in Ireland. Those functions must be separated and we must ensure that there are no conflicts of interest.
When does the Minister expect to have the board's proposals and when does he expect to make decisions?
I expect to have the board's detailed proposals shortly, probably within the next month. I will give that due weight and look at other options and make proposals.
