Madam, - I would like to make the following comments on your Editorial of August 5th, headed "VHI's future":
1. Privatisation is a matter solely for Government. VHI Healthcare has asked to be given the commercial freedom to allow it to compete on a level playing pitch.
For example, at the moment any new product introduced by VHI Healthcare must receive the approval of the Minister for Health and Children and this can lead to undue delays in bringing new products and services to our customers.
Our competitors have no such requirement. Consequently it is very much in the interests of our customers that we achieve this commercial freedom.
2. Whether or not VHI Healthcare remains in State ownership it is essential that, as with any insurance company, it has sufficient reserves to pay claims as they fall due. Solvency is the measure of this and because of historically low profits VHI's solvency is below what would be generally acceptable.
The surplus on operations was used to improve our solvency slightly from 30.5 per cent to 31.4 per cent. Our external actuaries have recommended we bring this to 40 per cent, which would bring us into line with industry norms. - Yours, etc.,
WILLIE SHANNON, Director, Finance, VHI Healthcare, Lower Abbey Street, Dublin 1.