OK. The alleged revelation came as a flash when reading the Report-of-the-Presidential-Task-force-on-Parastatal-Reforms released on Tuesday in the pm.

On page 139 it says;

There is also a need for the Ministry of Health to accord the Board operational autonomy and ensure that it operates the Fund like any other medical scheme. In this regard it is recommended that:

i. The National Hospital Insurance Fund should be allowed to operate like any other medical insurance service provider for its members and should be restructured to fully comply with the Insurance Act.

ii. The Fund should be regulated by Insurance Regulatory Authority.

Proposed Timeline: By December 2013

So what popped in my mind was whether NHIF being reformed and regulated under the Insurance Act means it has to re-insure like all other players? Is it already re-insured in its current form or are shortfalls covered by the exchequer? (needs answers, help!)

So you see it is speculative as the recommendations could go either way, but I believe it will be implemented as one of Jubilee's pledges of universal health care for all - Obama, sorry, Jubilee Care

Look here for NHIF's latest numbers, not bad: http://www.nhif.or.ke/he...=default&page=&

And the task force report: http://www.scribd.com/do...e-on-Parastatal-Reforms

Your thoughts? Thanks.

NHIF is unlikely to re-insure AND if it does so... I would NOT want to be a (shareholder of a) re-insurer of an entity whose sole purpose is to LOSE money. Positive profits & cashflows count more than higher revenue/turnover.

@kausha, @VVS thanks for your responses. Very much appreciated. In response, I'll say;

1. Compliance with the Insurance Act will be 100% and that's why the recommendation say for NHIF operate like any other medical scheme. Take NBK for instance. It is majority govt but is it not fully in compliance with & regulated under the Banking Act, hence, CBK?

2. I believe re-insurance is re-insuring risk premiums/contributions, not operations. Hence, from the numbers provided NHIF collected 9.6B and paid-out 6B in claims. That's a under-writing surplus of 3.6B? I don't see the adverse need to turn to a re-insurer there.

3. The guidance given by NHIF board is under-pinned with great prospects of reform & transformation to operate a lot more professionally going-forward. Sure, there have been problems in the past, but that is now the whole essence of reforms.

Thus, I still view Kenya-Re a stronger proposition in the event.

I think we have a mix up here. Where we are looking at this issue in different eyes i.e from a investor's & from a member's.

Scheme, insurer whichever but we're in agreement that member contributions, like premiums, are to be paid and can either run a surplus or deficit depending on claims.

So my thinking is how a re-insurer can benefit from such (successful) conversion?