Varadkar welcomes completed authorisation of VHI
Minister for Health Leo Varadkar has congratulated the VHI on its authorisation as a regulated non-life insurance undertaking by the Central Bank of Ireland.
Minister Varadkar said: “I very much welcome that VHI is now regulated similar to any other health insurer and that from 31 July will operate as a limited liability company with subsidiaries. This is a significant achievement by VHI and is the successful result of a lengthy and very complex process. On behalf of the Government I particularly welcome that VHI has achieved authorised status without the need for Exchequer investment.
“This outcome is a testament to the company’s improved performance in recent years, the positive outlook for the health insurance sector generally, and the renewed ability of Irish companies to raise finance, both nationally and internationally.”
The authorisation of VHI, one of the largest general insurers in Ireland, is a vote of confidence in the health insurance sector and for the improved Irish economy in which it is operating.
Completion of the authorisation process also removes Ireland’s exposure to substantial EU fines by addressing the European Court of Justice judgement of September 2011, when the Court ruled that VHI could no longer benefit from derogation from the requirement to be authorised. VHI’s newly authorised companies will operate from 31st July.
The Minister added: “While the corporate structure of VHI will be altered, there will be no impact on VHI’s customers, policies or health cover and the VHI will continue to remain in State ownership.
“Authorisation of the VHI has been a major objective for the Government, VHI and the Department of Health for the past number of years and I recognise the leadership and commitment of the many people involved in reaching this successful conclusion. This is a very positive development for the health insurance sector generally and will help to ensure the availability of sustainable, competitive health insurance for all those wishing to avail of it.”
Since his appointment as Minister for Health, stabilisation of the health insurance market and increasing the numbers holding health insurance has been one of Minister Varadkar’s key priorities. An increase in the numbers holding health insurance helps to control premium inflation, thereby keeping health insurance affordable for all. Therefore in November 2014 he announced the introduction of the following measures:
- Lifetime Community Rating from 1 May 2015
- Young adult rates from 1 May 2015, and
- No increase in the Community Rating Levy in 2015 (from 1 March).
In terms of the sustainability of the health insurance market as a whole the Minister pointed to the increase in the number of people with health insurance (up by 80,000 between January and April) to 2.105 million.