BRITISH health insurer BUPA has said it may move into the Irish market to compete against the State owned VHI.

A spokesman for BUPA said yesterday it has a "strong interest" in operating in Ireland and is currently examining new regulations for the industry announced by the Minister for Health. "We are evaluating the best means to enter that market competitively" he said, but stressed that no firm decision has been taken on entering the Irish market.

BUPA is one of up to five British health insurers which has expressed an interest in selling health insurance in Ireland. Companies such as PPP, Sun Alliance and Norwich Union are understood to have held consultative talks with the Department of Health over the past 12 months, with at least one group expected to enter the market.

Mr George Rigby, of Sun Alliance in Ireland, yesterday, however, ruled out any move by the group into health insurance here. The group, which employs 300 people in its personal and commercial insurance business in the Republic has "nothing planned for Ireland."

The regulations, introduced last week, clear the way for international insurers to consider operating in Ireland, ending the VHI's monopoly in selling health insurance.

But the continuance of a community rating system in Ireland which stipulates that all subscribers pay a flat premium rate regardless of their age for health insurance cover limits the attractiveness of this market for many companies.

Most are reluctant to operate on that basis, preferring to offer cheaper health insurance to specific segments of the market.