Competition in the Irish Private Health Insurance Market

are one or two regulators. Furthermore, the Health Insurance
Authority and the Financial Regulator work with each other, where
appropriate, to avoid duplication in their dealings with insurers and a
Memorandum of Understanding has been agreed between the two
regulators in order to assist efficient cooperation.
4.48 There are advantages to maintaining a separate small health insurance
regulator.
• The special regulatory circumstances of health insurance, legislated
for in the Health Insurance Acts (1994 to 2003), combined with its
significance in delivering secondary healthcare in the economy
require a dedicated expert regulatory body to supervise the
subsector.
• The Minister for Health and Children is responsible for health
insurance legislation and the Health Insurance Authority has
functions pertaining to advising the Minister for Health and
Children. In this context, it is logical and consistent with normal
practice that the Minister for Health and Children is the responsible
Minister for the Health Insurance Authority.
• The Health Insurance Authority has a crucial advisory and decision
making role in relation to risk equalisation and this work benefits
from being carried out by a dedicated, specialist, expert body. This
point was recognised in the recent High Court Judgment in relation
to risk equalisation, which stated that “the establishment of the HIA
and its role in this continuous process is crucial given not only its
independence but also its expertise.”
• It might be difficult (or at least cumbersome and expensive) for the
Financial Regulator to recreate the functions of the Health
Insurance Authority within its organisation.
Other Examples of Dual Regulation
In Ireland, dual regulation exists in a number of sectors, for instance
waste management, 58 air transport, 59 pensions and life assurance. 60
Australia, like Ireland, has a mix of public and private secondary health
care. Health insurance in Australia also has a separate regulator (the
Private Health Insurance Administrative Council).
4.49 Costs of regulation for PHI firms can be expected to be passed onto
consumers. PHI firms need to be regulated as regards both prudential
soundness and adherence to the principles upholding the Irish PHI
market. Accordingly, PHI firms will be required to engage in a dual
regulatory process regardless of who is responsible for regulating
private health insurance. While the Authority has no objection in
principle to amalgamating the Authority and the Financial Regulator, it
remains to be shown that this would lead to significant efficiency gains
or that the quality of regulation in the market would be improved.
58 The Department of the Environment, the Environmental Protection Agency, and local authorities
59 The Commission for Aviation Regulation and the Irish Aviation Authority
60 The Financial Regulator and the Pensions Board
59