Health insurance group Vivas, which entered the market last year, has rejected calls for the introduction of risk equalisation payments.

Risk equalisation involves payments from insurers with a lower cost of claims to those with a higher risk base because they cater for older or less healthy subscribers.

The Health Insurance Authority is due to make a recommendation to Health Minister Mary Harney on the issue later this week, following a consultation process.

In a statement, Vivas said the arguments put forward by those in favour of such payments were 'without foundation and do not reflect the realities of the market'.

It said the introduction of risk equalisation payments would effectively see customers and new players handing over cash to subsidise the VHI, which had an 80% market share.

Vivas said it would welcome the opportunity to continue to provide products to people of all ages and said it could do this without the 'crutch' of risk equalisation payments.

Yesterday a report carried out for the Amicus trade union said that if the Minister for Health decided not to introduce risk equalisation, it would threaten the sustainability of the market.

Meanwhile BUPA Ireland has rejected suggestions that competition in the health insurance market had not led to a reduction in prices to consumers.

BUPA Ireland claimed that savings from choosing its products over those of its competitor had more than doubled since it entered the market.