VHI granted provisional Central Bank authorisation

The VHI has been given provisional approval to raise money to boost its reserves, rather than receiving additional funding from the Exchequer.

The European Union wants the VHI to obey minimum solvency levels that apply to its rivals, which led to the commercial semi-State applying for Central Bank authorisation last year.

This authorisation would require the VHI to have minimum solvency levels, and be authorised on the same basis as other private health insurance companies.

It had previously been expected that the VHI would have required significant injection of capital from the State.

The Central Bank said authorisation has been granted in principle.

A VHI spokeswoman said there will be some changes to the company’s corporate structure as a result.

“However, the changes will have no impact on customers’ cover and the terms and conditions of their over will be unaffected,” the spokeswoman said.

Minister for Health Leo Varadkar informed the Cabinet of the Central Bank decision at its meeting yesterday.

Varadkar statement

In a statement, Mr Varadkar said the VHI “has moved from a position of potentially requiring significant Exchequer funding for authorisation purposes, to one where it is committed to achieving authorisation without recourse to the Exchequer”.

“This turnaround is 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.

“Once VHI’s authorisation is completed, it will be regulated by the Central Bank, like other health insurers.

“This is the latest in a series of steps, including the introduction last week of Lifetime Community Rating, to support the continued viability of our community-rated private health insurance system, whereby the additional cost of being older and less healthy is spread across the insured population, and premiums are kept affordable for all those who wish to avail of it.”