Hibernian Insurance has confirmed its intention to enter the health insurance market in the Republic, but said greater clarification was needed on future regulation of the area.

The chairman, Mr James Culliton, told the company's annual general meeting in Dublin that Hibernian had been in contact with the Government indicating an interest in the sector, but was awaiting a response on certain issues.

The chief executive, Mr Adrian Daly, told The Irish Times that health insurance was a natural adjunct to Hibernian's current business. "We have been looking at the health insurance scene for the last year or two, and we have a lot of experience in the core areas involved," he said.

However, he added that several regulatory issued needed "clarification" before the company could provide health insurance products.

He said the risk equalisation mechanism, which is designed to prevent new entrants keeping claims down by cherry picking customers needs to be examined.

Risk equalisation is currently suspended, pending the publication of a White Paper by the Government, but has been strongly attacked by BUPA Ireland and defended vehemently by the VHI. Mr Daly said Hibernian was not "fundamentally against it" but said the "ground rules" for how it operated needed to be clearly explained.

Mr Daly predicted that further consolidation would take place in the Irish insurance industry and said the company was not "ignoring the possibility" that Guardian PMPA may come up for sale in the future.

It was recently acquired as part of the acquisition by Sun Life & Provincial of Guardian Royal Exchange.