VHI chief executive Jimmy Tolan has quit over his disagreement with Health minister James Reilly's future plans for the insurer. The government plans to break up the VHI into three separate companies.
The European Court of Justice has determined that Ireland has not fulfilled its obligations under European Law because it has failed to apply the European Union insurance legislation in its entirety to all insurance undertakings on a non-discriminatory basis. The decision will require Vhi to be regulated by the Central Bank of Ireland.Vhi Healthcare will require additional capital in order to meet the Central Bank’s solvency capital requirements.
Being regulated will require the insurer to increase the amount of money it puts aside to cover medical claims and will mean pumping an additional €330m into the company.
Earlier this year VHI premiums increased by between 15% and 45%. Premiums are likely to rise again because the VHI's new funding requirements will have to come from taxpayers, higher premiums or the part-privatisation of the insurer.
Health Minister James Reilly plans to break up the VHI into three competing companies in an effort to have more market competition. There are also plans to use the VHI as part of the plans to introduce a universal healthcare system.