Motor insurance again generated the highest number of complaints to the Insurance Ombudsman last year as the total number of written disputes referred to her office rose by 11.5 per cent.

In her annual report, the ombudsman, Ms Caroline Gill, says she dealt with 1,034 written disputes in 2000, up from 927 a year earlier. The office also received 7,020 telephone inquiries, a rise of 27 per cent.

Ms Gill formally adjudicated in 368 cases, ruling in favour of the complainant in 42 per cent of cases compared to 40 per cent in 1999.

A further 285 complaints were settled following mediation by the Insurance Ombudsman's office.

Motor insurance remained the most contentious issue, accounting for 257 complaints or a quarter of the total. No-claims bonuses and subrogation clauses - which give the insurer the right to prosecute and settle claims - were the most common problems.

Life insurance was the next most problematic area, accounting for 209 complaints. Travel insurance disputes continued to rise, increasing by 42 per cent to 73 in 2000. Ms Gill recommends a code of practice for the sale of travel insurance be established.

She notes the growing number of problems arising from conflicts about the nature of assurances given in the course of telephone conversations between policyholders and their insurance companies.

She recommends that adequate records be kept by companies of what is said during sales calls, claims calls or calls to helplines while policyholders should also keep a note of conversations.

Of the cases referred to the ombudsman, 78 per cent were eligible for consideration compared to 76 per cent in 1999. Issues such as premium rates, a source of controversy in the motor insurance sector at present, are outside the office's terms of reference.

The Office of the Insurance Ombudsman was set up in 1992 by the insurance industry to adjudicate in disputes between firms and their personal policyholders. Running costs totalled £495,000 (€628,520) last year, a sum funded by the industry.