Chubb European Group SE v The Health Insurance Authority

• Jurisdiction: Ireland
• Judge: Mr. Justice Murray
• Judgment Date: 08 April 2020
• Neutral Citation: [2020] IECA 91
• Date: 08 April 2020
• Court: Court of Appeal (Ireland)
• Docket Number: Record Nos. 2019/185

BETWEEN:

CHUBB EUROPEAN GROUP SE

APPELLANT

AND

THE HEALTH INSURANCE AUTHORITY

RESPONDENT

[2020] IECA 91

Whelan J.

Power J.

Murray J.

Record Nos. 2019/185

2019/186

THE COURT OF APPEAL

Health insurance – Enforcement notice – Judicial review – Appellant seeking the cancellation of directions contained in an enforcement notice – Whether the enforcement notice served by the respondent was bad in law for failing to properly specify a contravention of the Health Insurance Act 1994

Facts: The appellant, Chubb European Group SE, sold a health insurance policy known as the ‘MediCover Student Personal Medical Expenses Insurance Policy’. The Policy was made available to non-EEA students attending a course of education in Ireland. The respondent, the Health Insurance Authority (HIA), adopted the position that where a student is undertaking such an educational course of more than one year’s duration, they are ‘ordinarily resident’ in the State. It was HIA’s position that because Chubb was providing health insurance to such persons it was carrying on a health insurance business. Thus, HIA contended, Chubb was subject to certain obligations and restrictions imposed by the Health Insurance Act 1994 as amended. On 20th March 2017 HIA served an enforcement notice on Chubb pursuant to s. 18B of the Act. That notice recorded HIA’s opinion that Chubb was contravening the Act. The notice directed Chubb to restrict the availability of the Policy to non-EEA students attending a course of study of not more than one academic year, or to become a registered undertaking. Chubb challenged this enforcement notice by way of both a statutory application for cancellation of the directions contained in it (2017/185 MCA) and an application for judicial review (2017/353JR). In two separate judgments ([2018] IEHC 609 and [2018] IEHC 609, respectively) Burns J rejected all grounds of challenge advanced by Chubb in each case. Chubb appealed to the Court of Appeal against those judgments.

Held by Murray J that the enforcement notice served by HIA on 20th March 2017 was bad in law for failing to properly specify a contravention of the Act; the notice depended for its efficacy upon its being compliant with the statutory scheme, and it was not so compliant in a respect which was clearly material. He held that Chubb was accordingly entitled to an order under s. 18C(1)(a) of the Act cancelling the direction; this was without prejudice to HIA’s entitlement to serve a further and regular enforcement notice. He held that the authorities made it clear that there is no objection in principle to a determination that a group of persons sharing as a single common factor that they are in the State for a course of academic education of some duration, are for that reason alone ordinarily resident in the State. Construing the phrase ordinarily resident in accordance with the principles developed in the case law he considered, having had regard to the statutory scheme as a whole, non-EEA students undertaking an academic course of more than one year’s duration are ordinarily resident in the State. In so concluding, he was not out-ruling the possibility that students attending shorter courses are also so resident. He held that Chubb did not enjoy any legitimate expectation of the nature alleged in these proceedings.

Murray J held the appeal in the judicial review proceedings would be dismissed and that the appeal in the statutory application would be allowed, but only to the extent that the notice failed to specify a contravention of the Act as is required by s. 18C.

Appeal allowed in part.

JUDGMENT of Mr. Justice Murray delivered on the 8th day of April 2020

I. CONTEXT

Background.

1 The appellant (‘Chubb’) is a UK authorised non-life insurance undertaking. It carries on business in the State through a registered branch. The respondent (‘HIA’) is the statutory regulator of the private health insurance market. HIA is constituted by and discharges its functions pursuant to, the Health Insurance Act 1994 as amended (‘the Act’).

2 The Act provides for a system of mandatory registration of undertakings carrying on the business of effecting health insurance contracts. Once so registered, undertakings must comply with various obligations in the conduct of their insurance business. Chubb has not registered as an undertaking under the Act.

3 The Act provides, essentially, that a policy which provides health insurance cover to a person who is not ‘ordinarily resident’ in the State is not a health insurance contract for this purpose. Therefore, undertakings whose business it is to effect such policies are not by reason only of that business, required to register under the legislation.

4 Chubb sells a health insurance policy known as the ‘MediCover Student Personal Medical Expenses Insurance Policy’ (‘the Policy’). The Policy is made available to non-EEA students attending a course of education in Ireland. HIA has adopted the position that where a student is undertaking such an educational course of more than one year's duration, they are ‘ordinarily resident’ in the State. It is HIA's position that because Chubb is providing health insurance to such persons it is carrying on a health insurance business. Thus, HIA contends, Chubb is subject to certain obligations and restrictions imposed by the Act.

5 On 20th March 2017 HIA served an enforcement notice on Chubb pursuant to s. 18B of the Act. That notice recorded HIA's opinion that Chubb was contravening the Act. The notice directed Chubb to restrict the availability of the Policy to non-EEA students attending a course of study of not more than one academic year, or to become a registered undertaking.

6 In these proceedings, Chubb challenges this enforcement notice by way of both a statutory application for cancellation of the directions contained in it (2017/185 MCA) and an application for Judicial Review (2017/353JR). In the two separate judgments the subject of this appeal, ( [2018] IEHC 609 and [2018] IEHC 609, respectively) Burns J. rejected all grounds of challenge advanced by Chubb in each case. This judgment addresses the issues arising from the appeals by Chubb in both proceedings.

The Act.

7 One of the purposes of the Act (s.1A) is to ensure that access to health insurance cover is available to consumers of health services with no differentiation being made between them based on health risk status, age, sex, or the frequency with which such services are provided to those consumers. The legislation seeks to implement that objective by requiring undertakings operating in the health insurance market to register under the Act, and by imposing on registered undertakings various obligations and restrictions. These obligations are defined by four principles and requirements - community rating, open enrolment, lifetime cover and minimum benefit.

8 One of the objectives of the Act, expressed in s. 1A(1)(d), is described in the following terms:

‘ the importance of discouraging registered undertakings from engaging in practices, or offering health insurance contracts, whether by segmentation of the health insurance market (by whatever means) or otherwise, which have as their object or effect the favouring of the coverage by the undertakings of the health insurance risk of the more healthy, including the young, over the coverage of the health insurance risk of the less healthy, including the old.’

9 Central to this structure is the definition of when a body is, and is not, required to register. This is achieved by means of a prohibition imposed by s.16, contravention of which is a criminal offence:

‘ A person other than a registered undertaking shall not carry on health insurance business.’

10 Section 2(1) provides that ‘ health insurance business’ means ‘the business of effecting health insurance contracts’. ‘Health insurance contract’ is defined in the first instance, as follows:

‘ a contract of insurance, or any other insurance arrangement, the purpose or one of the purposes of which is to provide for the making of payments by an undertaking, whether or not in conjunction with other payments, specifically for the reimbursement or discharge in whole or in part of fees or charges in respect of the provision of hospital in-patient services or relevant health services.’ …

11 There are a series of exclusions from this general definition. Critical to these proceedings is that appearing at para. (d):

‘ A contract of insurance, or any other insurance arrangement, the purpose of which is to provide for the making of payments specifically for the reimbursement or discharge of fees or charges in respect of the provision of hospital in-patient services or relevant health services to persons or any dependants of any of them and one of the following conditions is satisfied –

(i) neither the said persons nor any such dependents are ordinarily resident in the State, or

(ii) where any of the persons to whom the said contract or arrangement relates are temporarily resident in the State during the subsistence of the said contract or arrangement –

(1) those persons are resident solely for the purposes of carrying out their duties as employees, and

(2) those persons constitute not more than –

(A) 20% of the total number of persons (other than dependents of them) to whom the said contract or arrangement relates, and

(B) 20 of the total number of persons employed in the State by the one person.’

12 The Act establishes HIA as the statutory regulator (s.20), defines its powers and functions (s.21) and (S.18B) enables it to serve an enforcement notice where it is of the opinion that a person is contravening, or has contravened and is likely to continue to contravene one of a number of identified provisions of the Act, including s.16.

13 Where there is a failure to take the steps identified in the enforcement notice, HIA may apply to the High Court...