Statement from Sean Quinn

national | miscellaneous | other press Thursday February 22, 2007 20:17 by shane o'neill - journalist shaneon at indigo dot ie 086-3188-199

BUPA - V-VHI

The recent controvery about risk equalisation and community rating took a dramatic twist when Sean Quinn of the Quinn Insurance Group offered to take over the policies from BUPA that have expired and offering to continue their cover under the new insurer.

He has also requested all those who have accounts with VHI to move to BUPA due to the overcharging as he sees it of equal policies and coverage provided by the quinn group under BUPA.

Here is the statement in full from Sean Quinn on the rushing through of the legislation to close the loophole that has made the whole area of new companys entering the market uncertain.

Statement from Sean Quinn, Chairman Quinn Group, in response to Government’s Emergency Legislation on Health Insurance

The rushing through of emergency legalisation last night by the Government has baffled and dismayed the Quinn Group. Our intentions at all stages in this process have been to bring much needed competition to a dysfunctional health insurance market and we feel the actions taken last night are unhelpful and unnecessary.

In our view, the position taken by the VHI and now backed by this legislation, is untenable. The VHI is in our opinion trading illegally without the required solvency, is charging far too much for their products and is being propped up by the Irish taxpayer without any accountability.

The Quinn Group is a private company which meets all Irish and international solvency obligations, employs over 4,000 people in the State and is currently contributing over €100m annually in taxes.

On Monday of this week the Quinn Group met with Minister Harney and the officials of her department where it was explained in unambiguous terms that the Quinn Group is fully behind community rating in the health insurance market and would actively work to ensure it was maintained. We explained that we do not believe risk equalisation to be necessary in order to support that position.

We also explained that the Quinn Group was willing to take over the entire VHI business without the need for risk equalisation payments in order to resolve the current impasse. We offered to put up a 100% solvency margin, rather than the normal 40% requirement in order to assure the Government that there would always be money there to pay to the claims. The VHI has been the State insurer for many years, has an extremely loyal customer base and is currently charging much higher premiums – therefore, there should be no need for risk equalisation payments.

This situation is not the current Minister’s fault, but unfortunately it is not unusual in Ireland and whilst we do not want to get involved in a slanging match, I can think of other State-owned businesses that were not able to compete with the private sector and either had to be subsided, sold or bailed out.

We completed a contract with BUPA based on existing legislation and now the Government brings in emergency legislation to make us subsidise their own business, which we believe to be trading illegally. How can we be expected to run a business if Government can change legislation retrospectively which changes this business from a profitable activity to a loss- making one?

I and my colleagues went down to Fermoy last Friday night, met all the staff and took them out for dinner. I gave them a personal commitment that we would commit ourselves fully to Fermoy and I intend to honour that commitment. I would ask the public to support us in that commitment by moving your business immediately to Quinn and give a clear message to VHI. The existence of theVHI in its current form, with no solvency margin and being subsidised by its competitors, is totally at odds with any definition of fair play.

We have reduced the price of general insurance in Ireland by 45% over the past five years and have more than trebled our market share. Our health Insurance prices are very competitive and have been frozen for 2007. We will accept transfers from VHI and expect that in 95% of cases we will reduce people’s bills while providing them with immediate cover.

In the meantime, in the interests of our policyholders and in order to create a fair and competitive health insurance market for all, we intend to fight this draconian legislation, the risk equalisation scheme and the
legality of the VHI through the necessary and appropriate channels.

While we do not like being involved in this unseemly and unnecessary row, we feel that with the contracts and commitments we have made to our policyholders and staff we are left with no option. Thankfully, we have the financial strength to fight the total inequities imposed on us and our customers in order to make the Irish health insurance market one of the best in the world and one we can all be proud of.

Ends.