The chief executive of health insurance company Vivas Health has criticised "continual regulatory interference" in the market.

Oliver Tattan told the Oireachtas Joint Committee on Health and Children yesterday that, every three months, the company was being dragged through a round of consultations lasting three months on the possible introduction of a controversial risk equalisation mechanism.

"This consultation process is both lengthy and costly to Vivas Health at a time when it should be focusing on growing its business. This form of continual regulatory interference in a new business is not sustainable. The validity of this continuing process must be examined," he said.

Mr Tattan said the company believed risk equalisation payments should not commence without the dominance of VHI first being dealt with.

"To implement payments when there is a dominant undertaking of the magnitude of VHI in the market would be bad for Irish consumers and will kill competition in the market," he said.

Risk equalisation is a form of compensation under which companies with older subscriber profiles would receive payments through the regulator, the Health Insurance Authority, from rivals with younger members.

Mr Tattan said that the Australian health insurance market, which the Authority has said was closest to that in Ireland, had 26 companies with the largest having a 29 per cent market share.

He said that the Oireachtas committee had not heard the views of health insurance companies such as AIG, Axa, Allianz, Norwich Union and Friends First, which were growing but decided against entering the Irish market.

The chief executive of Bupa Ireland, Martin O'Rourke, said that the proposals on risk equalisation were "deeply flawed". He said his company would gladly swap its accumulated €70 million profit over the last eight years for those of VHI for 2004.

He confirmed that BUPA had far fewer subscribers aged over 65 than VHI. However, he said that, until last July, the company was forbidden by regulations from seeking to recruit this group. Since this restriction was lifted, more than 1,000 had joined BUPA Ireland.

Mr O'Rourke disputed the proposition that older people were a big burden. He said that the market was profitable and that included older people.

He denied strongly that Bupa had engaged in price following or "cherry-picking".

The committee heard that Bupa Ireland had placed €55 million of its total profits in its reserves and invested the remainder in other healthcare projects. One dividend of €6 million had been paid.