The Quinn Group, which earlier this year acquired Bupa Ireland, has brought a fresh High Court challenge to the implementation of the risk equalisation scheme in the health insurance market.
Brian O'Moore SC, for the Quinn Group, argued in court yesterday that if his client had to make estimated risk equalisation payments of some €130 million over the next three years, it would suffer immeasurable loss and damage.
Risk equalisation is a policy which means other insurance companies must compensate VHI for its older and less profitable customer base.
The Quinn Group contends the risk equalisation scheme gives the VHI, which has 75 per cent of the health insurance market share, an "inestimable" competitive advantage and would make it impossible for Quinn to compete in the market against VHI. It claims the scheme is unconstitutional and in breach of EU law.
Mr O'Moore said the Health Insurance Authority was carrying out an assessment to determine risk equalisation payments and its first report was due in about a month's time.
The Quinn Group contends the scheme should not be implemented pending its challenge and pending the outcome of a Supreme Court appeal by Bupa against the High Court's rejection of its challenge to the scheme.
The Quinn Group secured leave from Mr Justice Michael Peart yesterday to seek orders in judicial review proceedings restraining the implementation of the scheme.
Among several claims, it says the scheme should not be implemented while the VHI board remains exempt from a requirement to be authorised by the financial services regulator and exempt from solvency requirements of various EU directives.
This exclusion means VHI does not have to maintain any financial reserves regarding its solvency which, the group claims, gives the VHI a "pivotal commercial advantage" of some €45 million a year. In contrast, Quinn says it has to meet such solvency requirements.
The proceedings are brought by Quinn-Direct Insurance Ltd, Quinn Financial Services Holdings and Quinn Group Ltd, all part of the group established by billionaire Seán Quinn, against the Health Insurance Authority, the Minister for Health, Ireland and the Attorney General.
The group wants to restrain introduction of part of the risk equalisation scheme, at a minimum, while the VHI remains exempt from solvency requirements requiring it to maintain a reserve of 40 per cent of net written premiums.
The proceedings were returned for mention to October.
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