Consumers will face higher premiums to meet the hundreds of millions of euros in costs that insurance companies will have to pay to secure additional capital under the Government’s proposed universal health insurance system, actuaries have warned.

In a submission to the Government consultation process on universal health insurance, the Society of Actuaries in Ireland said the additional regulatory capital required by insurers to operate the proposed new system could be between €1.6 billion and €2.4 billion.

It said that obtaining a significant increase in regulatory capital was not straightforward. It was important that the design and implementation of the proposed universal health insurance system was transparent to potential capital providers and that they had “reasonable confidence in its success and long-term stability and therefore that a commercial return on the invested regulatory capital is achievable”, it added.

“Insurers will, in practice, pass the cost of obtaining this capital on to customers in the form of higher premiums,” the society said. “Collectively, this cost of capital will likely amount to several hundred million euro a year.

"There is a regulatory mechanism for the universal health insurance capital requirement to potentially be substantially reduced under the new regulatory capital framework to be introduced in 2016 by the European Insurance and Occupational Pensions Authority, called Solvency II.

"The Central Bank will, in practice, decide whether any such universal health insurance capital reduction is warranted under this regime."