The Department of Health has given the first public indication that the State-owned health insurer VHI may be able to generate sufficient capital funds from its own sources to secure Central Bank authorisation without exchequer support.

The deputy secretary general of the Department of Health, Fergal Lynch, said yesterday it appeared that earlier proposals, which would have seen VHI seek a significant capital injection from the State to facilitate authorisation, seemed off the agenda.

However, he told a press conference to launch the Government’s universal health insurance plan that there were no guarantees on this issue.

May deadline
Separately, in a report to be given to the Oireachtas Committee on Health and Children today, the Minister for Health James Reilly states that the VHI is framing its application for Central Bank authorisation on the basis that it will not require State funding.

The Irish Times has reported that the VHI had been given a deadline of May by which it must apply for authorisation from the Central Bank.

The European Commission has been intensifying its scrutiny of the Irish health insurance market, following the recent 12-month extension of the deadline by which the Government must adhere to the terms of a European Court of Justice ruling which found VHI's status as a non-regulated entity to be discriminatory.

VHI has now been given an effective deadline of May by which it must apply for authorisation by the Central Bank, it is understood.

€200m investment
Two years ago the Cabinet was told that an investment by the State of more than €200 million could be required to facilitate Central Bank authorisation of the VHI. However, this situation has changed considerably since then.

In his report to the Oireachtas Committee today, Dr Reilly said: “VHI’s solvency did improve in 2012 and whilst final accounts for 2013 are not yet available, I understand there will be further improvement in 2013. VHI Healthcare has put in place a number of initiatives to improve its solvency position . . . The VHI aims to achieve the solvency required without having to rely on Government funding, and VHI is framing its application for authorisation on this basis.”