EC refers VHI to European Court of Justice
The European Commission has referred Ireland to the European Court of Justice over the exemption of the VHI from certain EU rules on non-life insurance.
This follows a complaint to the Commission alleging that the VHI is unlawfully pursuing insurance activities without being subject to the First Non-Life Insurance Directive.
The Commission takes the position that the VHI of today differs considerably in terms of membership and activities from the VHI of 1973 when the exemption was granted.
According to Hibernian Aviva Health, the decision is "an important step towards a fairly regulated and more competitive health insurance market, which will be of benefit to all health insurance consumers".
In the past these exemptions meant the VHI was discharged from certain obligations, including those concerning the legal form that needed to be adopted by companies offering non-life insurance services, the amount of the minimum guarantee fund and the solvency levels that are normally required for every insurance undertaking operating in the EU.
Hibernian Aviva said: “The Financial Regulator requirements are designed to protect consumers and require regulated insurers to operate in accordance with consumer protection codes and maintain capital solvency levels of 40% to ensure each insurer is positioned to pay their customer’s claims.”
Jim Dowdall, Managing Director of Hibernian Aviva Health said: “In light of today’s decision, we believe the Government should review its decision to impose a levy on health insurers which is, in effect, a subsidy to the VHI. 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.”
