The European Commission has issued the Government with a formal notice in relation to the regulatory status of the VHI and it now has two months to respond.
It follows the European Court of Justice judgment against Ireland last September which found the State had failed to apply EU law in relation to regulation of the health insurer.
In a statement this evening, the Department of Health said the effect of the September ruling is that the VHI can no longer benefit from derogation from the requirement to be authorised by the Central Bank of Ireland and have minimum reserves, like other non-life insurers.
The Department said that the formal notice received today was a procedural one; it had to be issued within six months of a judgment and was expected.
The Department said it would continue to work with the Commission to deal with the issue of the legal status of the VHI.
It said that since the September judgment, the Government had agreed to engage with the Commission to address the ruling, work with the VHI and the Central Bank on an application for authorisation by the Central Bank with a decision then to be taken on capitalisation.
The government had also agreed to examine the legal and legislative requirements to allow for the VHI to be incorporated as a limited company and to examine other options for the future status of the VHI.
