THE VHI board is expected to decide on Monday to look outside the organisation to find a replacement for departing chief executive, Mr Brian Duncan. The board members are understood to be keen to find a new chief executive as quickly as possible, to prepare the organisation for the challenge of competition from the British company, BUPA.

Monday's board meeting may decide to ask a board sub committee to progress the appointment of a new chief executive.

Mr Duncan is due to resign on October 18th and the board is likely to want a new chief executive to be selected before then to allow for a smooth transition.

Some sources had suggested that the board might consider an internal candidate for the appointment. However, it has emerged that the board is most likely to decide to look outside the VHI for a successor. Any appointment would have to be approved by the Minister for Health, Mr Noonan.

The new chief executive will enter an organisation where his two predecessors resigned after disagreements with the chairman or the board.

Mr Tom Ryan resigned more than two years ago, after differing with chairman Mr Noel Hanlon on his role. Mr Brian Duncan resigned a week ago after a report from a board sub committee called for his contract to be terminated. He rejected the findings of the report as unjust, but subsequently reached a settlement with the board.

The board of VHI is understood to want a new chief executive in place as soon as possible to tackle the problems facing the organisation. Part of the row between Mr Duncan and the board concerned new product proposals, put forward with the support of Mr Duncan but rejected by the board. Board members believe that new products must now urgently be developed to attract new members, particularly younger subscribers.

The VHI also needs to improve its financial position and find a way to stem underwriting losses without continual increases in premiums to subscribers. Last year, the underwriting deficit was £15 million, up from £12 million the previous year. This has meant that the organisation has had to rely on investment income to support its finances.

The organisation is likely to try to develop new procedures for managing its relationships with health providers such as the private hospitals - another source of tension with Mr Duncan. Its board may also propose that the Minister for Health look at new ways of controlling the costs to the VHI of the continued improvement in medical technology, a key factor in pushing up costs and therefore premiums.

Among the other factors which have caused boardroom tensions in recent months are the way that internal VHI information found its way to the Department of Health.

The report into the board and management of the VHI drawn up by the four person sub committee looked at the disagreements which had build up between the chief executive and the board. It was critical of some aspects of Mr Duncan's management - a finding he strongly rejected - while also commenting on the role of the chairman, Mr Hanlon. Mr Hanlon's current term is due to end next February.