The Constitutional Court has ruled unconstitutional a law requiring health insurance companies to reinvest in the healthcare system all profits they make from the public health insurance market.
The National Council has 6 months to change the law, starting from the date on which the Constitutional Court's decision is published in the Collection of Slovak Laws, failing which the law will become ineffective.
When private health insurance companies were first able to enter the public health insurance market in 2005, they faced no restrictions on their use of profits.
This changed in 2008 with the passing of the amendment to the Health Insurance Companies Act. At the time, two state-owned and four privately-owned companies were competing in the health insurance market. Now, only one state-owned and two private insurers are operating there.
A motion was filed in 2008 by a group of members of the National Council to suspend the effect of the law change. This was dismissed by the Constitutional Court.
Now, almost three years later, the Constitutional Court has ruled that the amendment is inconsistent with constitutional rights to own property (Article 20 of the constitution), conduct entrepreneurial activities (Article 35) and protect property (Article 1 of the Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms).
The Constitutional Court ruled that the amendment substantially restricted the ownership rights of private insurance companies and their shareholders. It also found that it was unacceptable intervention into their fundamental right to conduct an entrepreneurial activity and interfered with general constitutional principles.
The decision may be criticised on the grounds that it may prejudice arbitration proceedings currently ongoing against the Slovak Republic and the pending damages claims in the common courts, both being brought by the health insurance companies' international shareholders.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
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The original publication date for this article was 09/02/2011.