DOG IN THE MANGER

Published by VenEconomy

VenEconomy: The Insurance Business Act, passed following its second debate, gives a mortal blow to insurance and reinsurance companies, private clinics and health care centers, and the population in general.

Here are just some of the main absurdities:

Insurance and reinsurance companies will not be able to grant loans, thus closing the doors to a series of alternatives for placing their reserve funds; nor will they be able to finance insurance premiums, which will leave millions of Venezuelans without coverage, forcing them to join the millions who are already without any type of health care.

Disproportionate economic burdens are imposed on these companies, among them: a special contribution for the Insurance Business Superintendency of between 1.5% and 2.5% of net premiums collected, instead of 0.3% as previously; default in paying or uncollectible quotas will no longer be grounds for annulling financed premiums; and huge fines and prison sentences.

The law forces the companies to assume new risks, among them coverage for agricultural projects, projects by the communes, and users with pre-existing medical conditions. What it does not provide for, and even inhibits, are adjustments in the premiums, leaving the setting of compulsory affordable rates to the Superintendency of Insurance, for which it has full discretionary powers. The regime does not seem to want to understand that, in the insurance business, companies require an actuarial study to allow them to precisely calculate the cost of the services provided and the risk involved.

The communal councils are given the authority to investigate claims filed with the insurance companies.

No provision is made with regard to the requirements for setting up and operating an insurance brokerage firm, leaving this to regulations to be established at a later date.

Within a period of five years from the entry into force of this law, all government service agencies and offices must transfer their insurance plans to the public insurance companies and the national health system.

This law introduces more controls and greater discretionary powers, which will have a negative impact on the coverage provided and the quality of the service and even the possible disappearance of a fair number of private companies in this sector.

Once again, the government is bent on destroying a sector of the economy, offering, in exchange, a thousand and one alleged benefits, despite the fact that it is light years away from being able to provide them. It is common knowledge that the supply of health services by the State is negligible; the public hospitals, health care centers, Barrio Adentro modules, and even the new Immediate Health Care Centers suffer from all kinds of shortages and deficiencies.

Once again, the Chavez regime is being a dog in the manger, and, even worse, what it is doing is not even in keeping with a socialist system, where the State takes responsibility for providing the entire population with basic public health care services.