The health insurer, BUPA Ireland, is to withdraw from the Irish market.

The company is blaming the move on a scheme known as risk equalisation - which it says compels it to pay €1 million every week to compensate other insurance providers for covering older consumers.

300 people who work for BUPA, mainly in Fermoy, Co Cork, have been told their jobs are at risk.

The Minister for Health, Mary Harney, has said she very much regrets BUPA's decision.

BUPA says it will no longer accept new members and current memberships will not be renewed.

It says anyone who is in hospital, or about to arrange any medical treatment, will remain covered.

Members are entitled to transfer to another insurer with no break in insurance cover. 

The Managing Director of BUPA Ireland, Martin O'Rourke, said Irish consumers are the real losers as the market will be restored to a virtual monopoly.

BUPA has been providing health insurance in Ireland for the past ten years. It now has 475,000 members - a 22% share of the Irish market.

It has been warning for some time that it would pull out of Ireland if it were forced to make risk equalisation payments to other companies - mainly the dominant insurer, Vhi Healthcare.

These payments are intended to compensate Vhi for the extra cost of providing insurance for its much older age-profile consumers.

But BUPA, which has challenged these payments in the courts, insists they have made its business unviable.

SIPTU has condemned BUPA's decision.

SIPTU General Secretary, Joe O'Flynn, said the loss of so many jobs in North Cork would  have a devastating effect on the workers, their families and the community, while those currently in membership of BUPA faced uncertainty over their future insurance cover. 

He described the decision as an appalling response from a company which should have a much greater social conscience and attitude, given the nature of the business in which it is involved.

The Taoiseach, Bertie Ahern, has siad he is surprised at today's decision by health insurer.