The European Court of Justice has found that Ireland infringed European law by exempting VHI from insurance rules.

The exemption meant that VHI did not operate under the Financial Regulator like other insurers, nor did it have to provide a guarantee of solvency.

Ireland now has to pay the costs of legal action.

The Minister for Health James Reilly said VHI would continue to trade as normal, offering health insurance and paying out on claims.

He said however that the Government must make important decisions on how to address VHI's regulatory position. He said the Department of Health had undertaken significant preparatory work in anticipation of the judgement.