The Quinn Group, which took over BUPA Ireland last week, has said it is prepared to accept transfer of Vhi customers so all players in the health insurance sector can compete on a level playing pitch.
The Vhi has been objecting to the Quinn Group's insistence that, as it is a new entrant to the market, its first three years in business should be free of payments to the state-owned company to compensate it for its older customer base.
The Quinn group said today community rating - which means that everyone pays the same regardless of age - is in place in the health insurance market, and will remain so.
The group said that Vhi holds over 70% of the market and because of the customer base they have built up over the years their average premium is much higher than the BUPA/Quinn premium.
They added that as a commercial insurance company, it must set aside €0.40 of every €1 premium it writes, to cover its solvency margin, and the Vhi is exempt from this.
Harney seeks advice on VIVAS risk equalisation
The Minister for Health and Children, Mary Harney, has said she is taking legal advice from the Attorney General on whether VIVAS can avoid paying health risk equalisation subsidies.
The minister was responding to a claim by VIVAS that it could avoid risk equalisation payments in the same way as BUPA following its recent sale to the Quinn Group.
Ms Harney said she wants to see a properly functioning health insurance market with community rating and emphasised the importance of competition in the health insurance market.
She said the possibility of VIVAS changing its structure to avoid paying risk equalisation was something which would need to be addressed if pending legal advice proved that to be the case.
Earlier, VIVAS Chief Executive Oliver Tattan claimed that if the Quinn Group, which bought BUPA Ireland last week, was able to enter the health insurance market as a new entrant, VIVAS would also be able to side-step payments to Vhi Healthcare.
Risk equalisation involves the payment of subsides to Vhi, which has an older customer base that is more likely to make insurance claims.
