Expert group reviewing health-insurance sector

An expert group was appointed to review the health-insurance industry in Ireland following BUPA’s decision to exit the market, it was confirmed today.

Minister for Health Mary Harney said the three professionals would carry out a business appraisal of the private health-insurance industry.

One of the tasks of the group will be to consider whether, taking into account the need for community rating, an adequate rate of return is available in the Irish health-insurance market for companies in current conditions.

Last month, BUPA Ireland confirmed it planned to pull out of the Irish market after a High Court ruling ordered it to pay a multi-million-euro compensation package to its rival VHI under the Government’s risk-equalisation scheme.

BUPA’s pull-out would leave almost half a million people without private health insurance.

The outcome of last month’s court case left BUPA having to reimburse VHI for having a higher proportion of older and more costly members.

The British-based company said it could cost it around €160m over the next three years, while its estimated profit is just €64m.

BUPA said it was being forced out of the market as it has no prospect of remaining solvent under the system as it currently operates.

It has maintained it seeks a situation in which it is allowed to remain solvent and make a modest return.

The group, chaired by Colm Barrington, has been asked to report back to Ms Harney by the end of March.

The chairman, Mr Barrington, is managing director of Babcock and Brown Investment Bank in Ireland.

Another member, Dorothea Dowling, is group liability manager of CIÉ and chairwoman of the Personal Injuries Assessment Board. The third expert will be Seamus Creedon, who led the financial sector actuarial practice of KPMG in the UK.