IP/07/87
Brussels, 24 January 2007
Insurance: Commission scrutinises exemption of Irish Voluntary Health Insurance Board from EU rules The European Commission has decided to send Ireland a formal request to submit its observations on the continued legality of the exemption of the Irish Voluntary Health Insurance Board (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's request takes the form of a "letter of formal notice", the first stage of infringement procedure under Article 226 of the EC Treaty. Ireland is asked to send its reply within one month. Depending on the analysis of this reply, the Commission will decide whether or not to issue a "reasoned opinion" formally calling on the Irish Government to amend the relevant legislation. The European insurance sector has been subject to substantial harmonisation. For non-life insurance, the basic legal act is Directive 73/239/EEC (the First Non-life Directive), as amended and supplemented.
When work on that Directive was initiated in the 1960's, it was considered necessary to exclude certain public or semi-public monopoly institutions providing, in particular, health or fire insurance, from the scope of application of the Directive, and consequently, from all subsequent amendments. Accordingly, Article 4 of the Directive exempts the VHI, among other institutions, from the rules of the Directive. The listed undertakings are not subject to the Directive "unless their statutes or the law are amended as regards capacity".
Undertakings that are not exempted, or can no longer be considered to be exempted from the scope of application of the Directive, must comply with the relevant Non-Life Directives. The Commission is now examining whether the VHI – in light of the legal and commercial developments since its exemption was granted in 1973 – can still be considered to fulfil the requirements for exemption under the Directive.
The VHI is mainly regulated by the Voluntary Health Insurance Act of 1957 which sets out the statutory capacity of the VHI. It would appear that the VHI of today differs considerably in terms of membership and activities from the VHI of 1973 when the exemption was granted. It is clear from the number of amendments to the relevant legislation introduced in 1996, 1998 and 2001 that the capacity of the VHI has changed significantly.
For these reasons, the Commission is of the view that the exemption from the scope of the application of the First Non-Life Insurance Directive may no longer be valid. In that case, the VHI should be made subject to the provisions of EU non-life insurance legislation and hence, be subject to the same regulatory framework as other operators on the market.
Accordingly, the Commission has requested Ireland to provide further clarifications so that it can complete its assessment of whether the exemption of the VHI from the rules of the First Non-Life Insurance Directive is still valid.
The latest information on infringement proceedings concerning all Member States is available at:
http://ec.europa.eu/community_law/eulaw/index_en.htm
