BELGIUM – The regional government of Flanders is launching an ethically invested healthcare insurance fund at the start of next year with an initial BEF8bn (e200m) of capital, and an extra BEF4bn being contributed annually by the regional government.

The fund is looking for investment managers and is likely to announce mandate appointments in October, according to Edwin de Boeck, managing director of KBC Asset Management in Brussels.

The number of managers has not been decided yet, but De Boeck suspects that there will at least four managers appointed to run the fund’s assets.
“ The fund will be allowed to invest in equity to 30% and there is a prerequisite that these investments should be ethical,” says De Boeck.
“ It means in fact that the asset manager has to give details of the ethical aspects of its investments, a bit like in the case of the British pension industry, you need to be explicit on the investment standards.”

Discussion on what ethical investment means in respect to the new fund took place in Flanders at the beginning of the year.
According to De Boeck, the ecologist party, who were voted into the regional government after the initial decision for the establishment of the new fund in early 1999, together with the socialists, who increased the number of their seats in the last election, had demanded far stricter ethical investment rules, but have since agreed to more flexible regulation.

The fund will be completely for the use of Dutch-speaking Flemish pensioners without the means of receiving healthcare through other means.
The issue has sparked political debate in Belgium. Neither the French-speaking Walloons, nor the German-speaking minority in the east of the country, have access to a healthcare fund.

The opposition to the fund argues that its establishment causes inequality between the different parts of the country and more importantly, that it might spell out the end of federal social security in the country.
“ Social security in Belgium is a federal issue and this funded system for care insurance would only be allowed beyond the limits of what is in the social security system,” says De Boeck.