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Slovakia will face arbitration for health insurance profit ban
17 Jul 2008 Flash News
The Slovak Republic will face international arbitration over a law that bans private health insurers from retaining their profits, a measure pushed through by the government last year. On July 17, the six-month deadline for an amicable settlement of the dispute between the Slovak Republic and Health Insurance Companies of Eastern Europe (HICEE), the main shareholder in the Dôvera health insurance company, expired. HICEE sent a pre-arbitration notice to the Slovak Cabinet Office and the Ministries of Health, Finance and Foreign Affairs, demanding Sk15 billion (€497.91m) in an amicable settlement, a step necessary for any party to make before proceeding to arbitration.
HICEE Director Pieter de Kok told the SITA newswire that as the parties in the dispute were unable to solve the problem by reaching an agreement, HICEE would have no other option than to open arbitration proceedings in order to protect its investment in the Slovak health insurance company. Spokesman for the Slovak Finance Ministry Miroslav Šmál said that no agreement had been reached during the six-month period and that the ministry expected HICEE to initiate arbitration proceedings.
HICEE has already turned to an international law firm specialising in arbitration between investors and the state. Pieter de Kok stressed that they would demand full compensation for the damage to their investment. However, he specify a sum. Under the revision to the health insurance act, which Slovakia’s parliament passed on October 25, 2007, private health insurers are banned from paying dividends to their shareholders. Instead, any profits they make must be returned to the healthcare system. Prime Minister Robert Fico called the insurer's demands a brazen act of disrespect. HICEE, which holds more than 99 percent of the shares in Dôvera, and a 49-percent share in Apollo, another health insurer, is part of the Slovak private equity group Penta International Investment Group. SITA
Compiled by Zuzana Vilikovská from press reports
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