Dáil Éireann Debate, Thursday - 17 October 2013
200. Deputy Billy Kelleher asked the Minister for Health if Voluntary Health Insurance Healthcare will seek authorisation from the Central Bank of Ireland before the end of 2013; the estimated financial cost to the State of same; if the company’s reinsurance agreement with Berkshire Hathaway will have any impact on this; and if he will make a statement on the matter. [43939/13]
View answerThe Government agreed in December 2011 to address the European Court of Justice ruling of September 2011 and to work with the VHI in its application process for authorisation by the Central Bank of Ireland (CBI) subject to further Government consideration of any application for authorisation. Officials from my Department, the VHI and the CBI continue to engage regularly to progress the application. My Department is also in regular contact with the EU Commission in relation to the authorisation and related State Aid issues.
Given the recent private health insurance market developments, including changes to taxation and the report of the Health Insurance Authority in relation to Risk Equalisation, further analysis will be required. The VHI's readiness for authorisation and any subsequent capital requirements will be determined by the CBI after their assessment of VHI's application, taking into account their business plan, which may include options such as reinsurance.
Reinsurance, used to reduce the risks associated with underwritten policies by spreading risks across alternative institutions, may provide for the possibility of a reduction in capital requirements for VHI’s authorisation. Future capital requirements will depend on the nature and length of any reinsurance deal that VHI can secure. The CBI will take reinsurance into account when determining VHI's solvency and consequent capitalisation requirements.
