HIBERNIAN AVIVA would seek to prevent businessman Oliver Tattan from leading a bid for the State-owned health insurer VHI if he were to proceed with an approach for the company, insurance industry sources have said.

It was reported yesterday that an Irish consortium was in talks with German reinsurance company Munich Re about making a bid for the VHI and that Mr Tattan is leading the potential approach.

A spokesman for Hibernian Aviva, which purchased Mr Tattan’s insurer Vivas last year, declined to comment.

However, industry sources said that Mr Tattan had agreed to a non-compete clause with Hibernian as part of the company’s takeover of Vivas, which would prevent him participating in a rival insurance venture for three years.

Mr Tattan declined to comment on a report in the Sunday Times about his involvement in a potential approach for the VHI with Munich Re. He also declined to comment on any non-compete clause signed with Hibernian, saying he had signed a non-disclosure agreement with the firm as part of the purchase of Vivas.

It is understood Mr Tattan has completed one year of a three-year non-compete clause with Hibernian Aviva, for whom he agreed to act as a consultant for 12 months after the takeover of Vivas in April of last year.

A spokeswoman for the VHI declined to comment on the possible bid for the company, saying the insurer had no knowledge of it.

Plans to bring the VHI, the country’s largest health insurer, under the oversight of the Financial Regulator, which would require an investment of €100 million to €150 million to meet insolvency rules, have recently been delayed for several months.

The Government faces legal action by the European Commission for failing to implement an adequate regulatory regime to oversee the VHI. It had originally set a deadline of September 1st to bring the company’s solvency reserves up to 40 per cent of insurance premium income to be authorised by the regulator, but has since postponed that deadline until the end of the year.

The VHI had hoped that it could bridge the shortfall on its solvency ratio through payments from rival insurers under the risk equalisation scheme but that plan was rejected by the Supreme Court.

The company has a 66 per cent share of the health insurance market. Rivals Quinn Health Insurance and Hibernian Aviva have 23 per cent and 11 per cent shares of the market respectively.