Risk Equalisation: Presentation
Deputy Gormley: Do I detect a deep frustration on the part of the authority that the Tánaiste has not implemented its recommendations (if the Tánaiste were to decide to break VHI into four small companies, in order that there would be five companies of equal size in the market plus a very small VIVA)?
Professor Wood: I do not think so. With a committee of five people taking the decision, it only needs one member to change his or her mind for the decision to swing the other way. We are fairly even-minded about it.
Deputy Neville: It was a 3:2 decision.
Deputy Gormley: The authority says it is not a question of “if” but “when”. Is risk equalisation inevitable?
Professor Wood: It is inevitable. If one wants community rating, one must start risk equalisation eventually.
Deputy Gormley: When Professor Wood says the authority is even-minded, would he not agree that it is accepting the arguments of VHI in this regard? I have their arguments here and they are more or less the same as those the authority is putting to the committee.
Professor Wood: Not at all. If we had been here a year ago, we would have been putting forward the case BUPA gave us. We examine the figures, we are independent and unbiased. None of us has any connection with any of the insurance companies. We examine the issue afresh every time and consult with experts. The first two times we decided not to recommend it and the second two times we did. I am not terribly worried about what the Tánaiste does, as it does not make a great difference in what we do.
Deputy Gormley: How would Professor Wood describe the authority’s relationship with BUPA and VIVAS?
Professor Wood: Very good.
Deputy Gormley: Has Professor Wood been lobbied by politicians from either side of this debate?
Professor Wood: Not at all. I am almost five years in office and have never been lobbied by any politician of any party. May I ask if any politicians have been lobbied by any insurance companies? It is pretty evident in some cases.
Deputy Gormley: Has the authority made an arrangement with IFSRA? A statutory instrument was produced last year.
Professor Wood: Is this with regard to new entrants?
Deputy Gormley: Yes.
Mr. Ryan: Does the Deputy mean a memo of understanding or something such as that?
Deputy Gormley: Yes.
Mr. Ryan: We are in discussions with IFSRA concerning one.
Deputy Gormley: When will it be completed?
Mr. Ryan: I hope shortly but it is a matter for the two authorities.