Parliament, controlled by the cabinet of leftist Prime Minister Robert Fico, approved the bill designed to secure more money for the loss-making public healthcare system in October. It came into force in January.
“We are convinced that adoption of this law, which bans private foreign investors from managing profits, has caused damage,” said Martin Danko, spokesman of investment group Penta, owner of Health Insurance Companies Eastern Europe (HICEE). He said HICEE was seeking a pre-arbitration agreement with the government worth $656.2 million as estimated minimum damages to future earnings.
HICEE controls Slovak insurer Dovera and owns a 49% stake in another local insurer, Apollo. Dutch insurance group EUREKO, majority shareholder of another Slovak insurer, Union, also said legal action was in the pipeline. “We will defend our investment, and we will begin legal procedures under the bilateral agreement treaty between Slovakia and the Netherlands,” said Lorrie Morgan, press officer at EUREKO. “We will also file under the EU laws under the breach of free trade,” she said.
Fico, who won 2006 elections on promises to build a welfare state and improve healthcare for the poor, has said he did not fear the outcome of legal action against Slovakia. The law also cuts the amount private insurers can spend on their own administrative costs, such as salaries or advertising, to 3.5% from 4% of their income. Fico has reversed some of the measures of the previous centre-right cabinet, which had brought market principles into the struggling medical sector, which has an annual turnover of more than 100 billion crowns.
Private health insurers – closely held Apollo, Dovera, EZP and Union – have 1.7 million clients, or around 30% of all medical insurance clients in the post-communist EU member.
The state runs two health insurers that are used by the rest of Slovaks.
Health insurers posted a combined profit of about 2 billion crowns in 2006, most of which was made by the private firms. (Finance.cz)
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