Extending the penalty points system to a wider range of offences and imposing harsh sanctions on motorists who drive while uninsured will reduce insurance premiums, industry representatives have told an Oireachtas committee.

But more needs to be done to change the "claims culture" that has prompted huge premium increases over recent years, they insisted. Individuals found to have lodged fraudulent claims should face criminal prosecution, Mr Philip Fitzsimons, chief executive of FBD Insurance, told the joint committee on Enterprise and Small Business.

Rejecting charges that the industry too readily settles claims suspected of being fraudulent, Mr Fitzsimons said insurers were increasingly determined to confront those falsely seeking compensation.

The establishment without delay of a Personal Injuries Assessment Board is key to future reforms, although care should be taken that its book of quantum reflects European compensation levels rather than the Irish average, which tends to be disproportionately high, Mr Fitzsimons said. He added that the board should be allowed consider a wide range of claims, and not just employers' liability cases as is currently proposed.

The introduction of penalty points has already reduced insurance charges; FBD motor premiums have fallen 10 per cent in real terms this year, on the back of an increase of the same order in 2002, said Mr Fitzsimons.

There is evidence that judges are awarding less generous payments, which in turn has lowered the level of out-of-court settlements, the committee heard.

Employers' liability premiums can only be reduced through greater commitment to work safety, AXA Ireland chief executive Mr John O'Neill said in a separate presentation.