The European Commission has referred Ireland to the European Court of Justice over exemptions given to the Voluntary Health Insurance (VHI) that don’t apply to other insurers in the market.
The move comes after Hibernian Aviva Health complained to the Commission that VHI is not subject to the same regulatory framework as other operators including the amount of the minimum guarantee fund and solvency levels normally required for insurers.
In a statement released today the Commission said due to changes in its business model the VHI has lost its entitlement to remain exempt from the general insurance supervisory regime, “in particular the exemption which was originally granted under the First and Third Non-Life Insurance Directives.”
In its reply to the Commission, the Government said that through the enactment of the VHI (Amendment) Act 2008 the exemption will finish on September 1st this year. However, the Commission maintains that the Ireland has not put an end to the infringements.
VHI said the move by the European Commission was "expected”.
The insurer said it a goal of the company “to achieve Financial Regulation as soon as it has achieved the necessary solvency levels as required by the Irish Financial Regulator”.
“In the interim period, Vhi Healthcare has sufficient financial strength to ensure that the customer is protected at all times,” VHI said.
Jim Dowdall, Managing Director of Hibernian Aviva Health said he welcomed the decision as a “step towards the creation of a properly regulated and more competitive health insurance market”.
Mr Dowdall called on the Government to review its decision to impose a levy on helath insurers in light of today’s decision.
He said: “It is inappropriate to introduce a levy which is just designed to protect the market share of the Vhi which continues to be non-compliant with EU Commission requirements and remains outside of the control of the Financial Regulator".