Parliament yesterday passed the Hospital Insurance Amendment (No. 3) Act 2002 which will extend power to the Minister of Finance to "suspend or revoke insurance licences".

Finance Minister Eugene Cox said the amendment grew out of the current impasse between physicians and local health insurers and will complement new powers allowing the Health Minister to set a fee schedule for the embattled groups.

"The amendment requires insurers licensed under the Act to adhere to the scale of fees approved by the Minister of Health and Family Services," Mr. Cox said.

If an insurer refuses to reimburse fees according to such a schedule their licence might be suspended or revoked.

But Opposition Leader Dr. Grant Gibbons questioned the effects and duration of suspension under the amendment.

Dr. Gibbons declared an interest in the subject as his family is associated with Colonial Insurance, although he added, Colonial has not been party to the current medical fees "Mexican stand-off" as the company is not a member of the Health Insurers Association of Bermuda (HIAB).

"It seems that in the current legislation to revoke a licence is a nuclear option. Effectively the insurer would be out of business with their licence revoked," he said. "Suspending a licence would be more likely."

Dr. Gibbons questioned how a suspension might effect the overall health of the insurer and, similarly, those payments made to the insurer by clients and asked for an explanation of the suspension procedure.

He also asked why the amendment made reference to a previous Bermuda Hospitals Board (BHB) order from 1997 when there was at least one more recent BHB order from 1998 and questioned whether it was an error in the text.

Dr. Gibbons also questioned whether the amendment would allow insurers the leeway to question reimbursements for medical or dental procedures considered to be unnecessary.

Finally, he stressed that before any company has its licence suspended, the authorities that be must evaluate all potential consequences.

"It's not as thought through as it might have been," he said, regarding the amendment.

And while he called Bermuda's health care system "second to none", Opposition MP Maxwell Burgess criticised Government's handling of the ongoing dispute between the insurance companies and doctors.

"I would have pushed a little harder for parties to get in agreement. I can't believe that it could not have been worked out before this route was taken.

"Health care service would have been the winner had they talked a little longer."

Mr. Burgess also said had he been the Health Minister he would have resorted to seeking a mediator from overseas, if necessary.

"I would have shown two or three steps to show that I had made the effort," he said.

And he stressed how talk of an insurance company's licence possibly being revoked or suspended could cause the business to face premature closure.

"If I hear that x company is being considered for suspension, I am not waiting around," he said. "The threat of suspension could be the demise of the company.

"Rumours can wreak havoc on this Island. It is important to me that we protect the threat of suspension."

He also queried how many additional staff would be required to police whether or not a company should or should not disperse funds to an insurer.

But PLP MP Walter Lister disagreed with Mr. Burgess and said the decision was taken to introduce the amendment when they felt "enough was enough".

"The Opposition is giving the impression that this is something new, but it's quite obvious they don't know what they're saying," he said. "We are saying very clearly that we are asking parties to get together and should they reach an impasse again, they face the risk of being suspended. All we are trying to do is keep the health care system at a high standard."

While PLP MP Derrick Burgess echoed Mr. Lister's sentiments, he called the amendment a "good piece of legislation", but called for the end of age-discrimination in the insurance industry.

"I know of a couple who pay $1,100 a month for their insurance, which is like rent.

"What irks me is that some people who have never claimed during their working lives cannot get a decent rate once they retire."

But Opposition MP John Barritt said the bill had nothing to do with the claim Mr. Burgess was making. He called the amendment "false regulation" and said all the Government wanted was the power to threaten insurance companies with suspensions or revocations if they refused to process a claim.

"How the power to suspend will help the situation, I do not know. Had all bodies been consulted I don't think insurers would have come to this."

But Education Minister Paula Cox aggressively defended the amendment. She said, in her opinion, what gripped her the most about the bill is the thrust behind it that would allow all parties to remain on an even keel.

"When two elephants fight, the grass gets hurt," she said, referring to the people of Bermuda. "We've added some specificity...you are seeking to gave some measure of control for patient's rights.

"This is something that now works in tandem."