ePrivacy and GPDR Cookie Consent by TermsFeed Generator

Business news in Slovenia

Committee confirms more cash payments from mutual insurer facing privatisation

Ljubljana, 08 November (STA) - Dismissing warnings about potential incompatibility with the constitution, the parliamentary Finance Committee nodded on Wednesday to the latest version of the bill transforming Vzajemna, Slovenia's only mutual insurance company, into a public company. A key novelty are cash payments of up to EUR 130 as opposed to EUR 70 to the insurers "members".

The new status for Vzajemna, established in 1999 and generating 93% of its turnover via what is basically compulsory top-up health insurance complementing the public health insurance scheme, is coming as this insurance will be transformed into a mandatory contribution going to the national health insurance fund ZZZS starting from 2024.

The government says that Vzajemna will be able to stay in business after the supplementary health insurance is transformed and that the bill seeks to tackle and protect the property status of ZZZS as Vzajemna's founder and around 800,000 insured persons who are members, i. e. payers of Vzajemna's top-up health insurance fees and its de facto owners.

Vzajemna, which has about 350 employees, assessed in July that about EUR 20 million will be left at the end of the year in distributable value stemming from top-up health insurance.

The bill stipulates that ZZZS is to be reimbursed for its contribution to Vzajemna's incorporation, either in the form of shares in the public company or in cash. The same goes for Vzajemna's members, who are to be compensated for their contributions - the amount purportedly depending on the longevity of their membership.

While cash payments as opposed to shares were initially considered for Vzajemna's members whose "stake" is valued at lower than EUR 70, this threshold for a cash payouts has now been raised to EUR 130 with an amendment.

The new threshold entails more cash payments on behalf of the country's largest insurer, which controls almost 60% of the complementary health insurance market, and less share capital.

Vzajemna chairman Aleš Mikeln protested at today's session of the Finance Committee, saying "the proposal for a EUR 70 payout is already fraught with challenges, while increasing it to EUR 130 would mean capital inadequacy for Vzajemna".

Finance Ministry State Secretary Nikolina Prah begged to differ, saying that Vzajamna would be able to carry on even in the event of a full withdrawal by ZZZS.

Mikeln responded by arguing Vzajemna had accepted it would lose the top-up insurance payments and had been getting ready for the new situation, but that the proposal for transforming it had then come as a shock and was seen as the state preventing insurance holders from deciding on their own affairs.

He added that ZZZS is not entitled to the return of its founding capital, since it waived any claims on Vzajemna when it was set up.

Vzajemna expects that the Constitutional Court will halt the implementation of new bill, which was echoed by Suzana Lep Šimenko of the opposition Democrats (SDS).

"You say that the aim of the bill is to protect the interests of stakeholders, but unfortunately we in the opposition do not believe in your supposed benevolence," she said.

The National Assembly will vote on the bill at its next regular session, which starts on 20 November. Once the bill enters into force, the procedures for calculating the value of Vzejemna's capital as at 31 December 2023 can start, which will then be the basis for determining the shareholdings of the beneficiaries in the new public company.

Terms of use |Privacy policy | Financed by the Ministry of Economy, Tourism and Sport © SPIRIT Slovenia 2022